September 2024

Dear Readers,

As summer ends, the European Commission is aiming to resume its work with a new College of Commissioners, but their confirmation by the European Parliament is still ahead. When the new Commission does get back to business, there are numerous challenges to address, some of which we highlight in this collection of articles.

First, the so-called “Draghi Report” on European competitiveness lays out a case for what the EU can do to close the productivity and innovation gaps with the United States and China. Rather than slam the brakes at the mention of the word “debt”, Germany should support finding a solution with the EU rather than against it. Ultimately, investment to support these goals would be an opportunity not a burden for Germany, argue the authors Lucas Guttenberg (Bertelsmann Stiftung), Nils Redeker (Jacques Delors Centre) and Sander Tordoir (Centre for European Reform).

For more on EU competitiveness, another article, drawn from the 2024 Salzburg Trilogue, argues the EU must enhance its competitiveness in the face of rising protectionism, global pressures, and demographic shifts. Strengthening the EU Single Market is crucial for driving growth, with a focus on reducing barriers, especially in the services sector. Equally important is reinforcing international cooperation, securing critical trade agreements, and diversifying supply chains through strategic partnerships.

Another challenge is China’s overproduction, driven by state-supported investment, that has led to a flood of cheap exports, putting pressure on European industries. While lower costs benefit EU consumers in the short term, they also threaten European companies’ survival, risking long-term dependency on Chinese suppliers. We go into how the EU can respond to ensure fairer competition.

Finally, look ahead to next week’s National Council election in Austria with an article examining five reasons why one of the EU’s most prosperous countries finds itself in political turmoil and on the verge of a right-wing, Euroskeptic party’s victory.

We hope these articles provide new ideas on the challenges facing the EU today.

With warm wishes,

Malte Zabel

Co-Director
Europe’s Future Program

 
german flag buildt by stacks of coins

Why the Draghi Report Is a Huge Opportunity for Germany

Draghi’s report offers a refreshingly blunt analysis. It is an invitation – particularly for Germany – to tackle these issues jointly in a European framework. The report’s blueprint for a coherent industrial policy hits the nail on the head. If we get this right, Germany has much to gain. Businesses and households would have planning certainty and could rely on a large internal market where all economic policy levers now pull in the same direction.
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Austrian parliament building in Vienna, Austria

Infelix Austria? The Complex Realities Behind the Upcoming Austrian Elections

As the 29 September National Council elections approach, Austria finds itself on the brink of a significant political transformation. If the FPÖ wins, Austria could see the rise of a right-wing, Eurosceptic government, with the added complication of a fragmented political landscape that could require a three-party coalition to govern effectively. But what has led Austria, a nation that seems to have it all, to this precarious point? Read more

 
Euros notes on a European union flag background

More and More? Why Chinese Overcapacities are a Significant Challenge for the EU

China’s economy has grown significantly more than other developed economies in the past decades, but as domestic demand for Chinese goods declines, excess capacity is exported. This leads to price declines across global markets, and European companies that compete with Chinese suppliers are under pressure. Protecting against unfair competition from overcapacities will remain a significant challenge for the EU.
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Microelectronis production in European Union. PCB making machine

How to Stay a Global Power: Competitiveness is the Keyword for the EU’s New Legislature

Global pressures – such as the rise of emerging markets, demographic challenges, increasing protectionism, and the shift towards deglobalisation – are putting the EU’s economic prospects under significant strain. In response, the EU has made boosting its competitiveness a central focus for the upcoming legislative period. To regain and strengthen its competitive edge, the upcoming EU legislature must tackle the political and economic gaps that have hindered progress for decades. Read more

 

In the next edition

 

You will find articles on the “connectivity politics” of the South Caucasus and Central Asia and the Hungarian EU Council presidency.

To keep abreast of our work, please keep an eye on our blog: globaleurope.eu

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