Brussels Sticks its Neck Out: EU's New Game Plan Amidst Mounting Challenges
By Detlef Fechtner, Brussels
Makes her way forward
Former BaFin chief Jochen Sanio famously declared, "The ending year was not that bad, at least compared to the next one." EU Commission President Ursula von der Leyen might find herself nodding in agreement come 2025. The upcoming years are likely to place her in the eye of the storm, what with foreseeable clashes looming on the horizon.
First up is a potential tussle with global partners increasingly vying for dominance and, in extreme cases, proving to be adversaries – led by none other than Donald Trump. Should he follow through with his threats, stemming from his inauguration on January 20, to impose crushing import tariffs against Europe and the rest of the world, as well as substantial tariffs against China, the EU would face formidable trade policy issues. But the consequences go far beyond the realm of economics.
The specter of a tea leaf-tossing soothsayer offers a chilling premonition. If China floods the EU market with goods formerly unwanted by the US due to the high import duties, it will ignite a powder keg – one that threatens to burst between the Germans and French more than ever before. Brace yourself for a ferocious catfight between old frenemies.
But the EU won't go down without a fight. Its response? A multi-faceted strategy to safeguard its position as a major player in the global arena, maintain internal harmony, and navigate the treacherous waters of international trade tensions. Here's what's cooking in the Brussels kitchen:
- Embracing Strategic Autonomy: The EU is steeling itself for global leadership by fortifying its strategic autonomy in areas such as AI, quantum technologies, and the circular economy. In essence, the goal is to rely less on external partners and more on homegrown expertise.
- Revamping the Circular Economy and Industrial Strategy: The EU is pulling a 180 by revamping its circular economy and bolstering its industrial strategy. Initiatives such as the Circular Economy Act and the Clean Industrial Deal aim to create demand for secondary materials, reduce reliance on clean energy imports, and promote innovative technologies.
- Innovation and Research: The EU is pouring resources into future technologies through measures such as the Horizon Europe strategic plan for 2025–2027. This plan focuses on AI, space, and circular economy to foster innovation and address pressing challenges.
- Building Stronger International Relations and Trade: While the EU may be tight-lipped about specific strategies to tackle trade frictions with the US and China, it's clear that the pursuit of enhancing its internal market and strategic autonomy is a key component of its overall strategy.
- Simplifying Business Operations: The EU is streamlining red tape by promoting initiatives like the European Business Wallet and the Horizontal Single Market Strategy. These measures aim to decrease regulatory burdens and reinforce the Single Market for increased efficiency and competitiveness.
The EU's response may vary from placing a tongue firmly in cheek to throwing a fearless punch in the face of adversity. Either way, it's an approach aimed at ensuring the EU doesn't just weather the storm but comes out as a victor in the swiftly shifting sands of the global landscape.
Key Initiatives
- Data Union Strategy: Aiming to build Europe's AI prowess, this strategy intends to develop an internal data market.
- New Industrial Strategy and Clean Industrial Deal: Focusing on energy transition and promoting clean technologies, these measures aim to boost competitiveness and combat climate change.
- Horizon Europe Strategic Plan: Investing in areas like AI, space, and circular economy, this plan aims to drive innovation and align with EU's green and digital ambitions.
Stay tuned, folks – it's going to be a bumpy ride!
- The EU Commission President, Ursula von der Leyen, may find herself in the eye of a trade storm in 2025, as potential tussles with global adversaries loom, such as Donald Trump, who has threatened to impose tariffs.
- Should the US impose these tariffs, the EU would face formidable trade policy issues, and the specter of a heated conflict between the Germans and French may emerge, as China could potentially flood the EU market with unwanted goods.
- To counter these challenges, the EU is developing a multi-faceted strategy, including embracing strategic autonomy in AI, quantum technologies, and the circular economy.
- The EU is also revamping its circular economy and industrial strategy through initiatives like the Circular Economy Act and the Clean Industrial Deal, aiming to create demand for secondary materials and reduce reliance on clean energy imports.
- Furthermore, the EU is pouring resources into future technologies through the Horizon Europe strategic plan for 2025–2027, focusing on AI, space, and circular economy, with the goal of fostering innovation and addressing pressing challenges.
