Jeremy George’s Post

🗓️ #ECIPEMonthInReview During this past month of July, we published: 7️⃣ Blogs 2️⃣ Policy Briefs 1️⃣ Occasional Paper Check them out for the first time or re-visit them in the list below: 1️⃣ A Strategy for a Competitive Europe: Boosting R&D, Unleashing Investment, and Reducing Regulatory Burdens "Economic growth in Europe’s mature economies has stagnated, with productivity and other indicators of economic vitality showing poor results." ✍️ Andrea Dugo and Fredrik Erixon   Policy Brief ➡ https://buff.ly/3WaDsje 2️⃣ Summer Reading 2024 – Book Recommendations from ECIPE Full list ➡ https://buff.ly/3RVqTWS 3️⃣ The External Side of Europe’s Great Economic Transformation: International Trade in Services "Europe’s digital transition is starting to bear fruits [...] with sectors like information and communication technology (ICT) capturing a growing share of EU GDP." ✍️ Lucian Cernat, CARMEN DIAZ MORA and Oscar Guinea   Policy Brief ➡ https://buff.ly/3VWRPXj 4️⃣ Early reflections of a new UK trade policy approach – tensions to be resolved, narrative created "If the new Prime Minister thinks trade in the too difficult category, that is probably because such modern challenges were never properly defined or managed by the last government." ✍️ David Henig   Blog ➡ https://buff.ly/3zwT8od 5️⃣ EU-China relations – a health report after Xi’s visit and new EV tariffs "The political relations between the EU and China are deteriorating. They may not be on such a clear path towards fraction and decoupling as the US-China relation, but the writing is on the wall." ✍️ Andrea Dugo   Blog ➡ https://buff.ly/3VZKt5g 6️⃣ Draghi review must deliver a new start for Europe’s underperforming tech sector "It is time for Europe to get real about the consequences of losing further ground in the technology sector." ✍️ James Watson   Blog ➡ https://buff.ly/4bJHiVc 7️⃣ Future-proofing the EU’s Investment Attractiveness: A Bold Reform Agenda for Competition Enforcement, Taxation and Digital Policy "The EU’s future competitiveness is at risk due to a significant disparity in investments, particularly in technological innovation." ✍️ Dr Matthias Bauer, Dyuti Pandya and Oscar du Roy   Paper ➡ https://buff.ly/4fh0VHp 8️⃣ Europe vs United States – boosting competition in space and the skies "Europe's ultimate competitiveness challenge is not to prevent such a startup from arising to protect Airbus, but rather to ensure that, when it does arise, it is European." ✍️ Andrea Dugo   Blog ➡ https://buff.ly/4cU9vtq 9️⃣ How to improve the digital competitiveness of the European Union? "The EU needs to refocus on competitiveness, to refocus on its neighbours and it needs new leadership in European digital policy." ✍️ Philipp Lamprecht   Blog ➡ https://buff.ly/4fbprcU 1️⃣0️⃣ Webinar Summary: The Letta Report and How to Align Ideals and Action in Europe’s Single Market Summary ➡ https://buff.ly/4dhpX75

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

Mario Draghi pulls no punches in his analysis and plan for increased EU competitiveness which could be summarised by a cry for bravery, coordination and coherence. In his calls for growing productivity and growth, he’s really saying that ‘what got us here is not going to get us there’ and the EU needs to radically innovate and shift practice and mindset towards regulation, industrial strategy, risk-taking, lifelong learning and building skills (A man after my own heart!) – if we are to compete in a changing geo-political economy. The EU may have missed the boat already in some industrial sectors and Draghi may not get invited to the Christmas party by saying: ·        ‘This lack of dynamism is self-fulfilling’ ·        It takes 19 months on average to agree new laws – even before national implementation – Decision making needs to speed up ·        Innovative companies are hindered by consistent and restrictive regulation ·        Europe has no innovation clusters in the global Top 10 ·        More than 50% of SMEs in the EU flag regulation and admin burden as their greatest challenge. ·        ‘We have a too conservative attitude to risk, when it comes to financing’ ·        Industrial structures are static ·        Horizon Europe spread to thin and is complex and bureaucratic ·        EIC Pathfinder – led by EU officials rather than scientists and innovation experts, with a quarter of the funding of the US ‘DARPA’. In his report ( worth reading) Draghi calls for (amongst other things): ·         ‘Massive investment’ - €750+ bn required annually (4 times the Marshall plan!) with financing delivered more efficiently, with higher risk-taking and coordination. ·        Re-imagining energy pricing in EU so that businesses can benefit from de-carbonisation ·        Radical approach to decision making and strategic policy/priority setting, streamlined across member states ·        Full implementation of the single market ·        Skills and competences - focus on adult learning and vocational training ·        Interoperability and single approach ·        Cutting the regulatory burden on SMEs by up to 50% (yay!) While a reference to increased QMV and a Europe-Wide FDI 'Investment Screening Mechanism' may raise eye brows in various quarters in 'Ireland Inc.', there is a lot to be embraced in this report. Of key importance will be to see where it goes. Hopefully not into the long grass. There is much to be gained from a radical re-think of innovation across Europe. Innovate Island

Competitiveness may be at the heart of the EU's Strategic Agenda, but how do we know if policies are actually working? Our Competitiveness Scorecard is the answer 💪 Through a ten-point checklist, the Scorecard can improve the effectiveness of regulation 📃 Learn more ⬇️ https://lnkd.in/efcU8QfJ

Businesses urge EU to become more like the US “Benchmarking with the US helps us to understand why EU companies want to go to the US—and how they can stay in Europe.” https://lnkd.in/ebr2TTnD

European Parliament Think Tank (EPTT)--Briefing EU competitiveness: Issues and challenges [9 September 2024] https://lnkd.in/gPy_7aR2 or https://lnkd.in/gNyS3uuj Strengthening the European Union's economy in the face of rising global economic and political competition and managing the 'twin transitions' of the digital and green transformation is a key challenge for the 2024-2029 legislative term. This briefing highlights key aspects of the debate around strengthening the EU's economy. While the term 'EU competitiveness' is not clearly defined, there is broad agreement that it entails a range of policies focusing on, but not confined to, the EU's single market. The single market is far from complete, and abolishing barriers to trade would allow for efficiencies and economies of scale. We also look at other policies that are essential when it comes to safeguarding and strengthening EU competitiveness, in particular its industrial and energy policies, and outline the discussion around EU competition and investment policy. In doing so, it becomes clear that strengthening EU competitiveness is not a technical process confined to individual policies. Instead, it opens up deeply political discussions over the changing nature of the EU's economic and political model, with long-term distributional consequences. Given its very nature, there is no single answer to the competitiveness challenge confronting the EU. Without claiming to be comprehensive, this briefing rather seeks to provide a structure to the debate and point to some of the fundamental political and economic questions EU policymakers need to address during the 2024-2029 political term.

Draghi report, competitiveness and EU corporate reporting requirements facing backlash: The concerns echo key findings of the Draghi report, which highlighted the EU's struggles with productivity and global competition.

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

Thu 2024-06-06 03:52 Joint Statement on Australia-United States Strategic Commercial Dialogue FOR IMMEDIATE RELEASE  Thursday, June 6, 2024 Media Contact: Office of Public Affairs, publicaffairs@doc.gov Joint Statement on Australia-United States Strategic Commercial Dialogue SINGAPORE – Alongside the Indo-Pacific Economic Framework for Prosperity (IPEF) ministerial meetings in Singapore, U.S. Secretary of Commerce Gina Raimondo and Australian Minister for Trade and Tourism, Senator the Honourable Don Farrell, met on June 6, 2024, for the third annual ministerial meeting of the Australia-United States Strategic Commercial Dialogue. The Secretary and Minster reiterated the value of the Dialogue as a key mechanism to discuss shared Australian – United States economic and commercial objectives and committed to work together to support an open, stable, and prosperous Indo-Pacific region. The Secretary and Minister reiterated their strong commitment to the IPEF. Both commended the strong progress to date, including the signing of the IPEF Agreement Relating to a Clean Economy, IPEF Agreement Relating to a Fair Economy, and Agreement on the Indo-Pacific Economic Framework for Prosperity. They agreed the signing of these agreements marks another major milestone and paves the way for closer cooperation on matters of critical importance to the Indo-Pacific region. They also noted the success of the inaugural IPEF Clean Economy Investor Forum, which links industry and investors with climate technology and infrastructure projects. The Secretary and Minister reviewed progress made by Australia and the United States in taking decisive action to reduce carbon emissions and committed to continue to cooperate closely under the Australia-United States Climate, Critical Minerals and Clean Energy Transformation Compact. They noted the high level of ambition in this area reflected in the U.S. Inflation Reduction Act and the A Future Made in Australia agenda and recognized the importance of promoting the complementarity of these initiatives to investors and our private sectors. The Secretary and Minister reaffirmed the importance of strengthened cooperation on economic security in their discussions on trade, trade-distorting subsidies, national security issues tied to investment flows and continuing cooperation on investment screening, unfair trade practices and unfair competition. The Secretary and Minister agreed on the ongoing importance of the annual Australia-U.S. Strategic Trade Controls Dialogue, recognizing this platform allows frank and productive conversations on dual-use technology export controls, including shared objectives and approaches with other partners.

"The objective of this report is to lay out a new industrial strategy for Europe to overcome these barriers. We identify the root causes of the EU’s weakening position in key strategic sectors and lay out a series of proposals to restore the EU’s competitive strength. For each sector we analyse, we identify priority proposals for the short and medium term. In other words, these proposals are not intended to be aspirations: most of them are designed to be implemented quickly and to make a tangible difference to the EU’s prospects. In many areas, the EU can achieve a lot by taking a large number of smaller steps, but doing so in a coordinated way that aligns all policies behind the common goal. In other areas, a small number of larger steps are needed – dele- gating tasks to the EU level that can only be performed there. In still other areas, the EU should step back, applying the subsidiarity principle more rigorously and reducing the regulatory burden it imposes on EU companies." "A key question that arises is how the EU should finance the massive investments needs that transforming the economy will entail. We present simulations in this report to address this question. Two key conclusions can be drawn for the EU. First, while Europe must advance with its Capital Markets Union, the private sector will not be able to bear the lion’s share of financing investment without public sector support. Second, the more willing the EU is to reform itself to generate an increase in productivity, the more fiscal space will increase, and the easier it will be for the public sector to provide this support." It is interesting indeed that one of the pre eminent law makers recently wrote a series of suggestions on what Europe should do. The question might be: "What did you do when you were in charge?" or even "Why this suggestion arrive now (last month) instead when you were leading the policies?" Maybe I'm too critics. Or maybe not.