Ilkka Räsänen’s Post

The long-awaited #lettareport on the #EU #singlemarket came out today and does not pull any punches. It was good to have high-level endorsements last month for a more ambitious agenda from the Eurogroup (https://lnkd.in/e4BBRrMF ) and ECB (https://lnkd.in/eEkZmETx). Letta picks up much of this, and goes beyond, thankfully with a strong call for more integrated institutions, crucially in #ESMA, and the need for a more liquid and integrated EU market in safe sovereign assets. But leaders at this week’s summit will have a much more powerful rationale in Letta’s report to see the strategic significance of #capitalmarketsunion, given the funding needs of the key strategic goals we have set ourselves, crucially the green #transition (latest estimate: EUR 620 bn annually). “The attempt to create the Capital Markets Union over the past decade has not been successful, among other causes, because it has been perceived as an end in itself. True integration of financial markets in Europe will not be realised until European citizens and policymakers recognize that such integration is not merely beneficial for finance itself, but is crucial for achieving overarching goals that are otherwise unattainable, such as the fair, green, and digital transition.” “Without the private resources that will emerge from the establishment of a strong and authentic Savings and Investments Union, it will be extremely challenging to resolve the internal divisions within Member States concerning the allocation of national and European public resources needed to cover the costs of the transition. Some will quibble with the stronger public sector guidance to capital allocation, e.g. in a new proposed guarantee fund or public private partnerships. The case for CMU to be a new key strategic priority in a world that is both more fragmented and poses ongoing security threats to Europe has just become that much more compelling. https://lnkd.in/e6kXYYSn

A rainy weekend is not enough to fully devour Mario Draghi ´s  report in 2 parts but at least to grasp the essentials. Its worthwhile, though, to read slowly.   The report does not mince words. In clinical terms Part 1 analyzes the root causes of the EU ´s gradual demise over the last 20 years and brings into the spotlight the gap between saying and doing of EU policy making.   In Part 2 measures are provided. Those can be summarized as : more state where and when it benefits citizens and enterprises. The raison d´etre of  the EU is bluntly defined right on page 1 :  “This is an existential challenge. Europe’s fundamental values are prosperity, equity, freedom, peace and democracy in a sustainable environment. The EU exists to ensure that Europeans can always benefit from these fundamental rights. If Europe can no longer provide them to its people – or has to trade off one against the other – it will have lost its reason for being”  . This is a hard blow to the self-propelling bureaucracy in Brussels.  What holds the EU back? lack of focus, coordination , waste of resources. Some examples:  Þ   The lack of public support for so called “hard to abate” energy intense industries Þ   real disposable income grown about 2 x in the US compared to EU   Þ   “market rules prevent industries and households to capture the full benefits of clean energy in their bills. High taxes and rents captured by financial traders raise energy costs for our economy”   Þ  13000 passed legislative acts in the EU with 3500 in the US btw. 2019-2024 Þ   the failure in the EU to translate innovation into commercialization Þ   procurement for defense is awarded  to 3 /4 to non-EU suppliers  Draghi formulates 3 areas of action: 1.        Close the innovation gap vs China and US. One root cause:  2.        Joint plan for decarbonization and competitiveness.   3.        Increase security and reduce dependencies. Part 2 summarizes solutions and recommendations. The report lists 10 strategic sectors and defines clear measures. The number 10 seems popular. China as we know has defined has 10 pillar and 10 emerging industries. Not surprising that the defined industries are quite identical. Draghi wants a stronger EU governance but with self restraint , focused on those areas where it matters and provides value-added, and simplifying rules. The reports frequently refers to the regulatory plight of EU companies, more even of SME and small caps.   In short: more state only when it benefits the citizens and enterprises. https://lnkd.in/gGZtiwVB

As Kurt Vandenberghe points out in this post below, the Electrification Alliance met with him and Pierre Schellekens from DG ENER and @Eric Von Breaks From DG MOVE on Friday.    We shared our Electrification Alliance position on the electrification action plan and on the clean industrial deal. Our main message: Electrification will play a vital role in decarbonising industry and creating a strong and competitive industrial base in Europe. It also improves the EU's resilience and unlocks flexibility and cost savings. https://lnkd.in/eyrx-_Vw We are calling on the new European Commission to make electrification a priority. Some key messages:    - Electrification of industrial heat below 200°C is the low hanging fruit, industrial heat pumps should be the default solution. This should be front and centre in the Clean Industrial Deal and the Industrial Decarbonisation Accelerator Act. - 60%-73% of the heat pumps installed in Europe is also manufactured in Europe. This is an enormous opportunity for the EU's clean tech competitiveness.  - A proper assessment of the flexibility potential of distributed energy sources (like heat pumps) should enable the smart operation of the grids. Julie Beaufils @Bernard De Clercq @Chris Heron Quentin de Hults Cillian O'Donoghue Pierre TARDIEU william todts Michael Villa #100daysToElectrify

Having read parts of Mario Draghi's competitiveness report, I can say the summary by Jacques Pelkmans of CEPS (Centre for European Policy Studies) seems pretty good. It also gives some good debating points too. Feeling encouraged now to discover the other analysis by CEPS, given the recommendations by the Council of the European Union. (Good reads too if you want to join the EU institutions and impress the selection juries!)

A fair #green and #digital transition is a key priority for the future of the #EU Single Market. 🚩Empowering the Single Market to deliver a sustainable future and prosperity for all EU Citizens by Enrico Letta

Dear friends and colleagues, Von der Leyen II is set to go. Following a plenary debate in the European Parliament this Wednesday, MEPs voted in favour of President von der Leyen’s new College of Commissioners and its programme. The Commission’s first initiative will be a competitiveness compass, to close Europe’s innovation gap with the US and China, to increase security and independence and to deliver on decarbonisation. On the European Green Deal, she said, “we must and we will stay the course on its goals”. The President committed to presenting a clean industrial deal, launch a strategic dialogue on the future of Europe’s car industry, keep working on a competitive circular economy, and work towards a European savings and investment union. We know that the European Green Deal is an agenda that provides predictability and enabling conditions for modernising our economy and making our industry fit for a future that will be more "VUCA" - volatile, uncertain, complex and ambiguous - than ever. The competitiveness-enhancing decarbonisation compass will guide our work. This new college also means we bid a fond farewell to EVP Maroš Šefčovič and his team. I would like to wholeheartedly thank them for stepping up for the European Green Deal when they already had so much on their plate. At the same time, I’m very much looking forward to working under EVP Ribera and Commissioner Hoekstra’s leadership as soon as next week. On international affairs, the 1st EU-GCC (Gulf Cooperation Council) Investment & Finance Green Transition Forum successfully concluded on Tuesday in Abu Dhabi, bringing together leaders from government, finance, and industry to advance sustainable investments and green finance ecosystems across the GCC and EU. The forum concluded with a commitment to deepen collaboration. Closer to home, I opened the 15th ETS Compliance Conference this week. We brought together 350 experts from competent authorities and accreditation bodies of EU ETS and EU neighbouring countries. Our goal was to inform and exchange best practices about new and upcoming developments in the EU ETS framework. More ETS news: the Joint Committee under the EU and Swiss Linking Agreement concurred on the 2025 arrangements for the transfers of emission allowances between the two systems. This marks a continuing smooth cooperation with the EU’s fourth-largest trade partner, which also shares much of our goals when it comes to climate action. Today, there was electricity in the air. I met with the Electrification Alliance alongside Pierre Schellekens (DG ENER) and Eric von Breska (DG MOVE). They presented proposals to tackle barriers like grid bottlenecks and permitting delays. I welcomed these ideas, as electrification can help reduce fossil fuel imports and reduce our energy bills. I also acknowledged the need for better access to finance, highlighting the EU #InnovationFund as a model for mobilizing financing to accelerate electrification. Have a nice weekend! Kurt

It is January. The month which stirs our annual attempts to curb bad habits and replace them with good habits. How then should we rethink our accustomed approach to economic policy? Europe, and Czechia (and the USA), has the same challenge: how to generate the advanced technology that is the path to long-term prosperity. The EU has a structural issue in how it addresses innovation. Brussels is an engine for regulation. That is not its fault. That is how it was set up by its member states: to write the rules for a common market. Writing rules is therefore what it does. Ask it for a solution, and it will provide a rule. Need to fix climate change? Here comes ESG to make companies comply with targets. The flaw is that rules do not create technology. And more, better advanced technology is what Europe (and Czechia) require to compete with the rising and multiplying number of geopolitical competitors around the planet. The most effective method to create advanced technology is government, university and company investment and cooperation. As the Draghi Report on EU Competitiveness hints, the EU does not have the capacity to pursue an innovation policy, because it does not have the budget to invest in public research projects or to use public procurement to drive private technology development. That ability remains the province of EU member states. No EU member state has the resources to compete alone against the global heavyweights. And Denmark- for instance- is not likely to be very agreeable to spend Danish tax money to fund an EU program that generates more advanced technology in France. So how can the EU have an innovation policy that can compete against China? That is the key question AmCham’s policy leaders discussed with Czech MEP Ondřej Kovařík just before Christmas. Along with his fellow parliamentarians, Ondrej has the critical challenge of figuring out how the EU can stimulate the advanced technology development that delivers economic prosperity while mitigating climate change. Believing that rules will do it alone has proven a fantasy. Arguing that suspending, diminishing or eliminating those rules will deliver sustainable advanced technology is likely equally delusional. What is needed is a combination of clear targets, public financing of the research & development needed to achieve those targets, and public procurement aimed at creating markets for that technology. 2025 is going to show us how much we are willing to break with the thinking that has led us to today’s problems. Czechia is fortunate to have intelligent, diligent people like Ondrej pushing the country’s agenda forward in Europe.

We continue #GATTC24 with our In-depth sessions! Our speaker will discuss the dynamics of „Sustainable Trade: Planet, People Profit?” in session 1 and unravel the interconnected realms of trade policy and sustainability essential for fostering a future-oriented, sustainable global economy. While trade drives productivity, the key lies in aligning it with robust governance for lasting growth, prosperity, and reduced income inequality.      Sustainability encompasses ecological, social and economic dimensions, demanding a comprehensive approach. How can the EU and the United States collaboratively ensure due diligence across intricate supply chains, shaping trade in a sustainable manner? As we delve into this discourse, explore challenges in implementing due diligence legislation effectively and discuss design considerations to support small and medium-sized enterprises while avoiding trade disincentives.      Discover the pivotal role of recent acts like Germany‘s Supply Chain Act, the European Commission‘s Corporate Sustainability Due Diligence Directive, and the U.S. Uyghur Forced Labor Prevention Act in shaping sustainable trade. Join us in examining incentives and provisions fostering compliance and cooperation by transnational companies and how the transatlantic partnership can lead dialogue with Global South countries for transparent accountability on labor conditions and human rights. Kristina Hatas, LL.M. , Jörn Holtmeier, Lars Purkarthofer  

💪🏼 🇪🇺 A #5thFreedom for our Single Market to enhance Research, Innovation and Education in the EU! 4️⃣ The European Union is built on ‘four freedoms’, relating to goods, capital, services and workers’ movement. They are fundamental to the functioning of the single market and the integration of the continent. But they were built in a “smaller world” and are not enough to boost EU-Competitiveness in todays' "larger world" as Enrico Letta rightly says. 💡🍔 ❌ 🧀 No fastfood, but fasting here won’t forward! #TeamEU Take at least a gaze at the #LettaReport with many great recipies on how to enhance Innovation and EU- Competitiveness. Let’s boost investments in the EU and let’s build on Jacques Delors’ legacy! Matt Slabbert Emanuele Degortes Milena Richter Christina Kibsgaard Zsófia Szakony Edouard Ohleyer

Unsurprisingly the launch of the EU competitiveness report today (https://lnkd.in/edW33m5g) has been setting my social feeds on fire. There's a lot in there to digest, high-level takeaways focus on innovation, decarbonisation with opportunity and security and resilience. The detailed part B of the report has a lot in there for many different areas of interest but since I spend a lot of time reading reporting regulations that's where I started! There's a bit of a call out of the sustainability requirements for their regulatory burden and I'm already seeing that first line quoted. “𝘛𝘩𝘦 𝘌𝘜’𝘴 𝘴𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘳𝘦𝘱𝘰𝘳𝘵𝘪𝘯𝘨 𝘢𝘯𝘥 𝘥𝘶𝘦 𝘥𝘪𝘭𝘪𝘨𝘦𝘯𝘤𝘦 𝘧𝘳𝘢𝘮𝘦𝘸𝘰𝘳𝘬 𝘪𝘴 𝘢 𝘮𝘢𝘫𝘰𝘳 𝘴𝘰𝘶𝘳𝘤𝘦 𝘰𝘧 𝘳𝘦𝘨𝘶𝘭𝘢𝘵𝘰𝘳𝘺 𝘣𝘶𝘳𝘥𝘦𝘯”. Ouch! But I'm also interested in what follows next: The overall gist of the next section is that SMEs and mid-cap companies are those seeing disproportionate burden, it is the value-chains that seem to be the main area of concern, less so those large reporters. "𝘈𝘭𝘭 𝘵𝘩𝘳𝘦𝘦 𝘦𝘹𝘢𝘮𝘱𝘭𝘦𝘴 [sustainability reporting, GDPR, waste and packaging] 𝘢𝘭𝘴𝘰 𝘱𝘰𝘪𝘯𝘵 𝘵𝘰 𝘵𝘩𝘦 𝘯𝘦𝘦𝘥 𝘵𝘰 𝘣𝘦𝘵𝘵𝘦𝘳 𝘤𝘰𝘯𝘴𝘪𝘥𝘦𝘳 𝘵𝘩𝘦 𝘴𝘪𝘻𝘦 𝘰𝘧 𝘤𝘰𝘮𝘱𝘢𝘯𝘪𝘦𝘴 𝘢𝘧𝘧𝘦𝘤𝘵𝘦𝘥 𝘣𝘺 𝘳𝘦𝘨𝘶𝘭𝘢𝘵𝘪𝘰𝘯" Also included are some call-outs for areas of improvement that look sensible and don’t say there’s a need for dramatic changes (to me at least). • Rationalisation of inconsistencies and overlaps eg given include scopes of carbon and calculation methods across regulations • More guidance. There’s already some out there but I still hear calls for more certainly. • Direct assistance for SMEs and those companies in the value-chain, the report even specifically references software for reporting more than once. A quick note, I immediately thought of the value-chain transitional provisions for reporting companies that are also reliefs for those in their value-chain and exist now. I’ll be very interested to see where all the takes on this section land. Certainly the report continues on from here to make recommendations that are not specific to reporting and are based on the need for a coherent corpus of regulation and ensuring SME proportionality is included in proposals. I do have to acknowledge an even later mention of the "postponement" of particularly problematic initiatives for SMEs but even that is within the context of introducing specific mitigation for that group of companies.  I remain encouraged by that initial reference to the decarbonisation opportunity. Other key phrases that I saw on a quick look through included “improve circularity”, & “promote transparency” so I think the acknowledgement of the need for sustainability is clear. #CSRD #reporting #sustainability