Von der Leyen assessed the European Union’s economic and industrial policies at the annual conference organized by the French Association of Employers and Industrialists (MEDEF) in Paris.
Von der Leyen said Europe’s economic model had for many years been based on cheap imported energy, open global trade, growing access to the Chinese market, strategic protection provided by the United States and the West’s technological progress, adding that these conditions no longer existed.
Von der Leyen said European companies were simultaneously contending with high energy prices, fragmentation in the Single Market, complex rules and unfair competition, and stated that the scope for companies to invest needed to be expanded.
“Our goal is to make Europe a continent that produces, invests and ensures its security,” Von der Leyen said, adding that they would once again place industry at the center of European Union policies.
Administrative burden and legislation to be simplified
Von der Leyen announced a target of reducing the administrative burden on all companies in the European Union by 25 percent by 2029. The 12 simplification packages prepared are expected to save companies approximately 17 billion euros annually.
Von der Leyen said the entirety of Union legislation would be reviewed, duplicate regulations and reporting requirements would be reduced, and permitting processes would be accelerated.
Approach to reducing risks in trade with China
Von der Leyen said fair competition conditions needed to be ensured and that this was particularly important for economic relations with China. Describing China as an important economic partner for the European Union, Von der Leyen defined the Union’s approach as “de-risking without decoupling.”
Von der Leyen said some Chinese companies received eight times more government support than similar companies in Organisation for Economic Co-operation and Development countries. She added that imports from China had risen by 45 percent over the past five years, while the European Union’s exports to China had declined.
“Our trade deficit with China has reached approximately 1 billion euros a day. At the beginning of this year, the deficit increased by another 10 percent. For the first time, every European Union country is running a trade deficit with China,” Von der Leyen said, adding that the Union’s dependence on China for critical raw materials had exceeded 80 percent and, for some rare earth elements, 90 percent.
Von der Leyen said dialogue with China needed to continue, but that the European Union should be prepared to use its trade-defense instruments if no results were achieved.
Plan to channel savings into investment
Von der Leyen said Europe lacked sufficient financing capacity to enable companies to grow, noting that households held approximately 10 trillion euros in savings in bank accounts. She said work would be carried out to channel these savings into investment.
Von der Leyen said the Single Market remained incomplete in services, energy, telecommunications, finance and the digital economy, adding that this situation could have an effect similar to European Union customs duties.
Energy prices in Europe are two to three times higher than in the US and China
Emphasizing that energy was the main factor limiting Europe’s competitiveness, Von der Leyen said energy prices in Europe were two to three times higher than those in the United States and China.
Von der Leyen said Europe met more than half of its energy needs with imported fossil fuels, adding that dependence on imported fossil fuels had created an additional cost of more than 50 billion euros since the beginning of the crisis in the Middle East.
Von der Leyen said low-carbon energy production therefore needed to be increased in Europe. She noted that, thanks to renewable and nuclear energy, more than 70 percent of the electricity produced in the European Union came from low-carbon sources, but that electricity accounted for only about one-quarter of final energy consumption.
Describing artificial intelligence as one of the most powerful tools for improving productivity, Von der Leyen announced that the European Union had allocated 20 billion euros to AI gigafactories.
