1,200 billion euro problem: Draghi warned the EU, Orpo responded with his own recipe

Leaders of EU countries tried to find common ground to improve Europe’s competitiveness and strengthen the internal market at a retreat held at Alden Biesen Castle in Belgium on Thursday.

After the meeting, the Prime Minister Petteri Orpo (kok) told Kauppalehti that Finland’s greatest success at the meeting was the joining of the French president Emmanuel Macron drive to combat joint debt.

“The best news is the reduction of the joint debt together with Germany,” Orpo summed up the outcome of the meeting in terms of Finland.

The Prime Minister said that he emphasized at the meeting that Europe’s competitiveness problems are structural and cannot be solved with money alone.

Yes, money would also be needed, because the respected economist who visited the meeting, Mario Draghin according to the EU’s investment deficit is 1,200 billion per year. 500–1,000 billion is also needed annually in the European NATO countries to boost defense.

Kauppalehti asked Orpo where the money for investments and defense will come from if Eurobonds cannot be used?

“Eurobonds are a lazy solution, because Europe has a structural problem with competitiveness, and if you just try to fix it with debt money, then competitiveness will not improve,” said Orpo.

The Prime Minister said that he has a tight-lipped attitude towards the EU’s collective debt also because Finland is a net contributor to the EU.

The price of energy spoke

At the meeting, several leaders raised high energy prices as Europe’s most pressing competitiveness problem. Some of the leaders demanded a price ceiling for energy, and some emphasized the reform of the EU’s emissions trading system in order to curb the costs of industry.

According to Orpo, electricity in Finland is the cheapest in Europe, although high price spikes are seen on windless frosty days. In addition, many Finnish companies rely on a clean transition, which is accelerated by the EU’s climate regulation and emissions trading.

Orpo said that he emphasized to other EU leaders that the EU must stick to the jointly agreed direction of climate policy as well as the emissions trading system.

However, the Commission will probably come up with energy-related interim solution proposals that take into account the special needs of different member countries and industry.

Will competitiveness improve?

President of the European Council Antonio Costa summed up the meeting by stating that the EU leaders were unanimous that the easing of EU regulations must be carried forward and the internal market must be harmonized as a matter of urgency.

In addition, the EU aims to advance the so-called 28th system during this year, the purpose of which is to facilitate the operation of companies throughout the EU with uniform company rules.

According to Costa, in Thursday’s discussions there was also a broad consensus that there is a reason to allow company mergers in certain strategic sectors, so that investments and innovations can grow and new strong players can be brought to Europe. According to Costa, the ongoing revision of the corporate transaction rules plays a key role in this.

In terms of protecting strategic industries and reducing dependencies, the directors’ views were unanimous. Defense industry, space industry, clean technologies, quantum technology, artificial intelligence and payment systems were mentioned as particularly important sectors. In these areas, the EU plans to map critical dependencies and reduce them with the help of a “diversification strategy”.

France’s “buy European” demand, i.e. the use of European preference in certain strategic areas, was also viewed with reservation, as long as the decisions are based on careful analysis. The leaders also agreed that Europe must remain open to international trade.

The EU leaders will return to the specifics of strengthening competitiveness at the upcoming March summit.