Speech by President von der Leyen at the European Parliament Plenary on the conclusions of the special European Council meeting of 17-18 April 2024

Speech by the President: European Parliament Plenary

“Check against delivery”

Thank you, Madame President, dear Roberta,

Honourable Members,

Indeed, competitiveness was the topic of the European Council. Since the last European elections, our Union has weathered two crises of historic proportions. The COVID-19 health crisis and the war in Ukraine, with a ‘made-in-Russia' energy crisis. They could have turned into a dramatic economic and social crisis. But they did not. This was because of Europe's great resilience but also because we put the right policies in place. Like SURE, it saved 40 million European jobs. Or NextGenerationEU and REPowerEU, which fast-tracked the recovery and the deployment of home-grown renewables. I have not forgotten that in 2020, many predicted mass unemployment in Europe, and a long recession. It did not happen. Instead, today we have more people at work than at any other time in European history. Unemployment is at an all-time low, at less than 6%. Employment is at an all-time high, at over 75%. And inflation is now to close to our 2% target. Dear colleagues, we have gone through hell and high water but in many respects, we have come out stronger than five years ago.

Yet the shockwaves of these crises have taken a toll on Europe's competitiveness. The business model of many European industries was based on supposedly cheap energy from Russia and trade with a growing China. Today, we face a rogue Russia and a China struggling with domestic demand. And besides geopolitics, there are other trends that are impacting our competitiveness. In the last decade, Europe's labour productivity has risen by only 0.8% per year, compared with 1.1% in the US. These trends can only be addressed with a concerted effort at both European and national level. Therefore, restoring our competitive edge must be at the heart of Europe's economic agenda in 2024 and beyond. And I am absolutely convinced that with the necessary push, we can set off a new surge of European competitiveness.

At the European Council of last week, we listened to some very good ideas from Enrico Letta on our Single Market. Today, I want to look at four of the basic factors that determine costs, prices and productivity in Europe. Let me start with finance. Since we took office four years ago, we have unleashed an unprecedented wave of public investments in strategic sectors. Take energy and clean tech. We are investing EUR 400 billion from NextGenerationEU, and we have approved over EUR 550 billion in national public support, for clean tech and energy investment. This has been crucial. But public investment is not enough. The time has come for a systemic solution that mobilises Europe's immense private capital. And an essential part of this solution is to complete the Capital Markets Union.

EUR 470 billion – this is the additional private investment we could raise every year if we completed the CMU. The CMU was launched almost ten years ago. And since the start of the mandate, we have made progress on many of its elements. For instance, we have made it easier for companies across Europe, especially SMEs, to get listed on capital markets. But we have also faced a deadlock in Council, on many crucial aspects of the CMU. So, it is more than welcome that the last European Council marks a turning point. We now have a clear mandate to move forward on three vital issues. First: by harmonising national rules on topics like insolvency. That will give investors the predictability they need. Second: We will design and create cross-border savings products for retail investors. And third: The Commission has been tasked to strengthen supervision at European level of the most important market players. So there is a clear way ahead. If we are to fund the new industrial revolution of our times, we must mobilise Europe's private capital. And now it is time to turn the political will into action.

The second priority is reducing the cost of energy. Energy costs continue to affect our competitiveness, especially for energy-intensive industries. The International Energy Agency tells us that there might be some relief in sight. Last year, during the energy crisis, many investments have been done. A large wave of new LNG export projects is coming to the market. And we might soon be moving from a global shortfall to an abundance of LNG. As a result, we expect gas prices to fall. This gives us space to further develop renewable energies. And it is a telling success that last year for the first time we have generated more electricity from wind than from gas.

At this point, I want to thank this Parliament, for all your work to achieve our reform of the electricity market and the new Renewable Energy Directive. We must keep pushing to produce more cheap and clean energy in Europe. And we must also listen to our industries, as we have done in our Clean Transition Dialogues with ten different industrial sectors. One of their central demands is energy infrastructure. In this decade alone, our cross-border electricity transmission capacity must double. So, we need investments in smart grids and charging infrastructure, but also cables, pipes, turbines and electrolysers. We must build the physical backbone of the economy of the future.

The third priority is to address the labour and skills shortage that affects our economy. We need to train as many as possible of our unemployed youth. Every young person has great potential, even if they might be struggling with obstacles of all kinds. Let us make sure that they get the chance they deserve. We have to increase women's access to the labour market. Affordable and accessible childcare and good schools and flexible working hours for parents are an absolute must. Finally, we can offer more flexible solutions for silver workers to continue their careers, and we need to attract the right talents from abroad. We are investing EUR 65 billion in skills, through NextGenerationEU and the European Social Fund, and skills must continue to be at the heart of our action.

Finally, let us never forget that Europe is a trading continent, and we derive a significant share of our prosperity from trade. If it is True that in the next decade 90% of the most significant growth is happening in regions outside Europe, we should tap into it. And our Union is second to none in negotiating trade deals. We have the largest network of trade agreements in the world, with a total of 74 countries. The value of EU trade through these agreements surpassed EUR 2 trillion for the first time in 2022. And beyond exports, we need to secure imports, for example, of the critical raw materials that our industry needs. But trade needs to be fair. We need a global level playing field. And we need to address the risks that come with openness. We need for example tools to address issues of overcapacity produced outside the EU. I am speaking about structural overproduction, which is achieved to a large extent with subsidies. It has to go somewhere. Others are closing their markets. So our market is an attractive destination and our producers are at risk to be forced out of the market. And we also need to involve developing economies around the world, because their industrialisation is also threatened directly. We need a more structural response with our partners. Work is starting on this in the G7.

Honourable Members,

The last five years have taught us something. Time and again, we have surprised the sceptics, and defied the doomsayers. Because for a strong Europe, if there is a will, there is a way. And our continent will continue to be the global beating heart of industry and innovation.

Thank you, and long live Europe.