European Commission (EC) President Ursula von der Leyen today delivered a speech similar to the European Parliament's plenary session on the conclusions of the European Council yesterday at the World Economic Forum in Davos. She said, among other things, that the EC would present a competitiveness compass next week to reverse the lag behind the US and China and turn Mario Draghi's report into concrete steps.
Thank you, President Metsola, dear Roberta,
Mr President of the European Council, Mr António,
Honourable Members,
It is a pleasure to join this plenary debate with President Costa for the first time. And I would like to begin by thanking you, Mr António, for the excellent cooperation we have established between us in the first weeks of our joint mandate. We are only three weeks past 2025, but already there is a glimpse of the changes that are about to take place in global politics. We have entered a new era of fierce geostrategic competition. We are dealing with powers the size of a continent. And they are dealing with each other primarily on the basis of interests. This new dynamic will increasingly dominate relations between global actors. The rules of engagement are changing. Some in Europe may not like this new reality, but we must come to terms with it. Our values have not changed. But in order to defend them, some things have to change.
First of all, we have to work here at home. If we want to protect our interests and promote our values, we must also be economically strong. Europe, as you said, António, has all the tools to play its role successfully in the concert of powers. We have a private sector with a long tradition of innovation. We have a world-class workforce - highly educated. We have a unique social infrastructure that protects people from major life risks. And we have a huge single market of 450 million people. This is our safe harbour in rough waters and our strongest lever in tough negotiations. But our Union and our single market need attention and care. For us Europeans, the global race begins at home. And that is what we discussed at the European Council. And all Member States agree. It is at the heart of the Budapest Declaration on Competitiveness that we agreed during the Hungarian Presidency. And now, under the Polish Presidency, this agreement must be implemented. That is why next week we will present our new Competitiveness Compass, which translates the excellent Draghi report into concrete action. It will be the north star of this new Commission and will drive our work over the next five years. We set three objectives: First, to narrow the innovation gap with our competitors. Second, a common plan for decarbonisation and competitiveness. And third, strengthening our economic resilience and security. Let me give you some background on each of these.
When it comes to innovation, Draghi's analysis is very clear. There is a vicious circle of low investment and low innovation. This has led, for example, to a slower uptake of digital technologies in Europe. So how do we break this cycle? Certainly public investment must play a role. To be effective, coordination between the European level and the Member States needs to be improved. In particular, there are a few strategic areas that we really need to focus on, such as artificial intelligence, quantum and biotechnology, to name but a few - but that is what we need to focus on. We need to invest there, the Member States need to get involved, but we all know that public funding can never be enough. In order to support innovation at the right speed and at the right scale, private capital must also be involved. The good news is that European companies are already increasing their investment in innovation. Last year, European industry increased its investment in R&D by almost 10 %. For the first time in a decade, this is more than both the US and China. But we still have a lot of catching up to do. Thanks to these efforts, we have returned to second place in the world in terms of total private R&D investment. But again, we need to coordinate, we need to concentrate and focus on key areas. For this to happen and for us to be successful, we need a favourable capital market for our companies and specifically for our start-ups. And to support this, we will launch the European Savings and Investment Union. We will create new European savings and investment products, new incentives for venture capital and a new push to ensure a smooth flow of investment across our Union. We need to mobilise more capital so that European-made innovation and venture investment can thrive here.
Secondly, I would like to focus on the issue of energy prices. Energy prices in Europe are still structurally higher than in the United States or China, and they differ significantly within the European Union. We must therefore reduce them and, at the same time, complete the gradual move away from Russian fossil fuels. Both objectives are important and should go hand in hand. How can we achieve this? Not only do we need to continue to diversify our energy supplies, which we have done in the last two years. We will also need to invest in next-generation clean energy technologies, because this is energy produced in Europe, so it gives us independence. Take, for example, the topics of nuclear fusion or improved geothermal energy or semiconductor batteries, to name just a few. We also need to mobilise more private capital here to modernise our grids and energy storage infrastructure. So, again, the theme of a deep and liquid capital market. We need to remove all the remaining obstacles to our energy union. And we need to better connect our clean and low-carbon energy systems. All of this, and of course much more than I have mentioned today, will be part of the new plan for affordable energy that we will present in February.
My third and final point concerns how to strengthen our economic resilience and security. Global powers are now competing for access to raw materials and vital supply chains. In recent years, we have entered into more than 35 new agreements with partners around the world precisely to secure access to raw materials and clean hydrogen, for example, and to diversify some of our clean technology supply chains. This work will be even more important in the years to come. As you know, since the beginning of this mandate, in less than two months, we have already concluded three partnership agreements with Mercosur, Mexico and Switzerland. And last Monday we re-launched negotiations with Malaysia. These partnerships cover some of our key economic interests. They open up new and dynamic markets for us. They protect our distinctive products with geographical indications and key sectors such as agriculture. And they guarantee us access to important minerals and clean energy. Expanding our network of partnerships was therefore a key recommendation of the Draghi report. And we are working with Parliament and the Council to take these agreements forward.
This new engagement with countries around the world is not just an economic necessity, but must also be a message to the world. It is Europe's response to growing global competition. We want to work more closely with all those who are open to it. And this, of course, includes our closest partners. I am thinking, of course, of the United States of America. No other economy in the world is as integrated as Europe and the United States. Millions of jobs on both sides of the Atlantic depend on our trade and investment. The volume of trade between us amounts to EUR 1.5 trillion. But there is much more than these figures. Friendship, family ties, shared history and culture. We will keep this in mind when dealing with the new US administration. Our priority will be to establish cooperation early, to discuss common interests and to be ready to negotiate. And when the time comes to negotiate, we will pragmatically seek common ground. But I also want you to know that we will always stand by our European principles.
Thank you and long live Europe.
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