‘Fighting for our place in new global economy’: EU leaders meet to revive bloc’s economy

DCM Editorial Summary: This story has been independently rewritten and summarised for DCM readers to highlight key developments relevant to the region. Original reporting by Irish Times, click this post to read the original article.

A coalition of European Union (EU) states should move ahead with internal capital reforms to boost economic growth if the 27-state bloc cannot agree as a whole by the end of this year, Ursula von der Leyen has said.

The comments from the European Commission president come as EU leaders meet for an informal “retreat” at a castle in northeast Belgium on Thursday to discuss how to reboot Europe’s sluggish economy.

The leader-level meeting at Alden Biesen castle is expected to see something of a clash between more protectionist French-led proposals to help European industry and open trade proponents, such as Ireland and others, resistant to moves that might push the US and other economic partners away from the EU market.

A joint German-Italian paper, tabled in the days before the leaders meeting, calls for the EU to intensify efforts to chop back some of the regulatory burden coming from Brussels to make life easier for businesses and companies.

French president Emmanuel Macron has been championing a “buy European” scheme that would see more strings tied to EU funding and require greater portions of the cash flow into industries and firms based in Europe.

In a speech in Antwerp on Wednesday, Von der Leyen signalled another push to unblock long-stalled internal reforms, which would make it easier for investment and capital to move between member states.

The plan to create a single market for investment capital, first floated in 2015, has been bogged down by national governments’ reluctance to harmonise various laws, such as different rules around insolvency, company incorporation and tax.

Von der Leyen said a smaller coalition of eager EU states could push ahead and integrate their national capital markets and systems, even if the entire bloc were not on board.

Emergency rules, known as “enhanced co-operation”, permit a smaller group of at least nine member states to move forward on reforms in a scenario when there is no common consensus at EU-level.

Von der Leyen said the commission would consider backing deeper European integration by a smaller circle of states if the capital reforms remained logjammed.

“We want to do this by [2027], but if this is not possible at the end of this year I will propose to go with those who want to speed up in enhanced co-operation,” she said.

The idea of a smaller group of countries moving ahead on major reforms without the rest of the EU has always been controversial due to concerns it will open to door to a two-tier union.

In her speech delivered at an industry conference, Von der Leyen said the urgency facing Europe could not be greater. “We are fighting for our place in the new global economy,” she said.

Separately, a group of six countries, the Netherlands, Finland, Sweden, Estonia, Latvia and Lithuania, called for the commission provisionally to bring the EU-Mercosur free trade deal into effect “as soon as possible”.

Senior officials hope the discussion by national leaders on Thursday will tee-up formal decisions taken at a summit in Brussels next month.

In a statement, Taoiseach Micheál Martin said Europe “cannot afford to be complacent” in what was an increasingly “fractious” world. The EU had to get better at leveraging the potential of the bloc’s single market, he said.

Martin said there was a need to “remain vigilant” to the challenges facing strategically important industries, but warned against protectionist tendencies.

“Putting up walls is not the answer – continuing to engage and build partnerships is vital for Europe’s future competitiveness,” he said.