EU creates its own competitiveness pact to consolidate itself as a global power after Trump’s victory

Ane Barcos/Aquí Europa The informal meeting of the heads of state or government of the EU concluded this Friday with the adoption, by the Twenty-seven, of the Budapest Declaration, a commitment by European leaders to face the economic, geopolitical and demographic challenges that affect the region, with the aim of guaranteeing its sovereignty, security and influence in the global panorama. At a press conference, Hungarian Prime Minister Viktor Orbán, the driving force behind the initiative, stressed that one of the main objectives of his country's presidency of the EU Council has been to strengthen Europe's competitiveness, given the concern that the bloc is falling behind major global competitors such as China and the United States. Thus, the heads of state and government of the European Union adopted this Friday in Budapest the Declaration on the New European Competitiveness Pact promoted by the Hungarian Presidency of the Council. The president of the Government, Pedro Sánchez, did not participate in the meeting in order to "be able to deal with the emergency caused by the DANA," as he announced last Tuesday to Von der Leyen, Orbán and his "European colleagues." Among the key commitments of the declaration, Orbán mentioned the need to implement an administrative "simplification revolution" in order to reduce reporting obligations for companies. "We are going to drastically reduce reporting obligations, which represent a significant burden for European companies," he said. The pact also underlines the urgency of ensuring EU energy sovereignty and moving towards climate neutrality, while seeking to encourage greater investments in research and development to keep Europe at the forefront of disruptive technologies. The leaders pledged to take immediate action to reduce energy prices, and increase spending on research and development to reach 3% of EU GDP by 2030. "We will ensure that 3% of European GDP is spent on research and development by 2030," Orbán said. Von der Leyen For her part, European Commission President Ursula von der Leyen highlighted the strengths of European competitiveness, such as its high life expectancy, a quality education system and the reduction of CO2 emissions. However, she acknowledged that there are areas in which the bloc needs to improve, particularly in the area of innovation. In this context, she stressed the need to reduce the innovation gap with other global players, mentioning the importance of transforming research results into products and scaling these advances on the market. Von der Leyen also stressed the need to increase private investment, especially in research and development. She noted that, although Europe has high levels of savings, a significant part of these funds are not allocated to productive investments. She therefore proposed the creation of a deeper capital market that allows these savings to be channelled into valuable investments. The head of the Community Executive announced that, in the first 100 days of the new mandate, a Clean Industrial Pact will be presented, based on Mario Draghi's report, in order to help industries achieve climate neutrality by 2050. In addition, she stressed the need to reduce energy prices, a crucial issue due to the energy crisis triggered by the war in Ukraine, and highlighted the importance of simplifying permits for renewable energy projects. Make Europe Great Again The leaders also addressed the need to create a European defence industrial base, and the implementation of competitiveness tests for each new legislative proposal in the EU. The text underlines that adequate funding will be crucial to achieve the stated goals, with a focus on mobilising both public and private resources. Orbán expressed renewed optimism about the future of Europe, stressing that the region must focus on its growth and competitiveness. “If the Americans have decided to make America great again, there is only one possible answer for Europe: to make Europe great again,” he concluded. Viktor Orbán emphasised that the results of the commitments set out in the declaration should be visible within six months. Although French President Emmanuel Macron suggested a wider timeframe of around two years, Orbán was confident that “six months is enough” to see concrete progress. Relations with the US after Trump's victory: is a trade war looming? The bloc's relations with the United States were also the focus of much of the discussions during Thursday's European Political Community and informal meeting of EU heads of state and government. President von der Leyen said she had called President Trump to congratulate him and discuss several key issues, including Ukraine, defence, trade and energy. She described the conversation as brief, however, but focused on key aspects of the transatlantic relationship. Facing the possibility of a trade war with the United States under Trump, von der Leyen stressed the importance of addressing common interests between the two sides and then entering into negotiations. As for Trump's trade proposals, Orbán noted that these would likely benefit US interests more than those of Europe, so the EU would need to be strong, innovative and able to negotiate a good deal. "The question is how good we are, how strong we are, how innovative we are," Orbán said, hoping that both sides could reach a favourable agreement. Von der Leyen was asked how Trump's election could affect the creation of a European Defence Union and common military procurement, and suggested that in some cases it might be wiser to fund certain military capabilities at European level rather than in a fragmented way across the 27 member states. In this regard, she proposed two strategies: diversifying supply sources through trade alliances with other regions and fostering the circular economy to reduce the need for new raw materials, taking advantage of recycling to recover valuable resources. Also, regarding the possibility of Trump cutting US aid to Ukraine, Von der Leyen reiterated that Europe must be clear with its American allies about the global threat posed by Russia. She explained that while Russia is a direct threat to Europe, it is also a threat to global security, as it aligns itself with other authoritarian regimes such as Iran, North Korea and China. She insisted that the security interests of Europe and the United States are interconnected, especially in relation to the war in Ukraine and global security.

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