The first quarter of the 21st century is coming to an end, and despite the progress in technological advancements and poverty reduction, the cooperative world order that many imagined 25 years ago has not come to reality.
That was the opening message of European Commission President Ursula von der Leyen at the keynote speech that she delivered today at the World Economic Forum in Davos.
During the speech, the President made a diagnosis of globalisation in today's world: last year, global trade barriers tripled in value, technology controls have quadrupled in recent decades, supply chain dependencies have been weaponised, and the very interconnectors that bring the world together, such as undersea cables, have become a target.
"We have entered a new era of harsh geostrategic competition. The world's major economies are vying for access to raw materials, new technologies and global trade routes," the President said.
Nevertheless, she expressed her deep conviction that there has to be a balance between safeguarding security and taking opportunities to innovate and enhance prosperity for people.
The President recalled that the EU is the second world economy and the biggest trading sector in the world. It benefits from a unique social market economy, with high social and environmental standards, low inequalities, and an immense pool of talent.
The President said this is the basis for the EU to change and match the world's new challenges. She outlined the main points of the roadmap that will be adopted by the Commission next week to guide its work in the next five years: "The focus will be to increase productivity by closing the innovation gap. A joint plan for decarbonisation and competitiveness. To overcome skills and labour shortages and cut red tape. It is a strategy to make growth faster, cleaner and more equitable, by ensuring that all Europeans can benefit from technological change."
President von der Leyen described the three main pillars of the new plan: deeper and more liquid capital markets, more ease to do business, and more secure energy supplies.
With a European Savings and Investments Union, new saving and investment products, incentives for risk capital, and a renewed push for seamless flows of investment, the EU will mobilise capital to support made-in-Europe innovation.
President von der Leyen also assessed the ease of doing business in the EU: "Too much of our top talent is leaving the EU because it is easier to grow their companies elsewhere. And too many firms are holding back investment in Europe because of unnecessary red tape." To tackle that, she announced a far-reaching simplification of sustainable finance and due diligence rules.
She also emphasised the need to address the remaining national barriers in the EU's Single Market. Instead of dealing with 27 national legislations, innovative companies should operate under a so-called 28th regime across the whole Union, with a single framework of corporate law, insolvency, labour law, taxation, etc. "This will help bring down the most common barriers to scaling up all across Europe. Because continental scale is our greatest asset in a world of giants," the President said.
Concerning energy supplies, the President commended the speed with which Europe rid itself of its dependency from Russia after Vladimir Putin tried to blackmail the EU with energy when he invaded Ukraine. "But freedom came at a price. Households and businesses saw sky-high energy costs and bills for many are yet to come down", the President added.
Although clean energy is thriving in the EU, the President said that the Union still has to mobilise private capital to modernise electricity grids and storage infrastructure, better connect its clean and low-carbon energy systems, and that all remaining barriers to create a true Energy Union must to be removed.
An open and global Europe
Moving on to the world stage, President von der Leyen underscored the EU's commitment to the Paris Agreement and said Europe will stay the course. She also called on unity to harness the potential of AI and manage its risks. She said: "Europe will keep seeking cooperation – not only with our long-time like-minded friends, but with any country we share interests with. Our message to the world is simple: if there are mutual benefits in sight, we are ready to engage with you. Europe is open for business."
She highlighted the major agreements reached by the European Union in recent weeks with Switzerland, Mercosur, and Mexico, which demonstrate the attractiveness of the EU's offer. Building on these achievements, she announced that the first trip of the new Commission will be to India, where she will seek to upgrade a strategic partnership with the largest country and democracy in the world.
On China, she reminded that the EU has taken measures in response to China's market distortions, and while it will continue to de-risk its economy, the EU should seize the opportunity to engage with China and, where possible, expand mutually beneficial trade and investment ties.
Finally, President von der Leyen referred to the EU's close partnership with the US. She stressed that European companies employ 3.5 million Americans, American medicines are made with European chemicals and tools, Europe imports twice as many digital services from the US as from the rest of the world, and 50% of the LNG imported by the EU comes from the US. Together, the EU and the US represent almost 30% of global trade in goods and services.
"A lot is at stake for both sides. So our first priority will be to engage early, discuss common interests, and be ready to negotiate. We will be pragmatic, but we will always stand by our principles. To protect our interests and uphold our values – that is the European way," the President concluded.
