rainer kordes’ 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

Interesting to see the name of the portfolio of Teresa Ribera who will be one of 6 European Commission executive vice-presidents, overseeing a “clean, just and competitive transition”, including holding the powerful competition policy brief as European Union's antitrust regulator. Can we have the 3 "clean + just + competitive" at the same time without eroding the profitability of companies, or is that an oxymoron? If we were to price in nature and fairness into the consumer price, could it be competitive? Or does it mean that, to be competitive, companies will have to absorb these additional costs and reduce their return on equity? Perhaps we should instead bet on the fact that a just and clean transition will reduce risk premiums required by investors and lenders for European companies, thereby increasing their valuation? European Parliament

#FreshFromThePress Super-Mario does it again! A report on EU competitiveness which details: 1/ The weak points of EU competitiveness 2/ Why massive productivity improvements are essential 3/ Concrete propositions for the required new framework Key takeaways on the four building blocks to achieve an effective and collective EU industry strategy: #1 Building Block Full implementation of the #SingleMarket 🔥 Remaining trade frictions in the EU mean that Europe is leaving around 10% of potential GDP on the table. 💡 For an in-depth analysis of the Single Market conundrum, dive deep into "Much more than a market report" by Enrico Letta (Publication Date: April 2024, see link in comment) #2 Building Block Align industrial, competition, and trade policies to fulfill the overall strategy 💡 Important Projects of Common Interest (#IPCEI) should be expanded to include all forms of innovation that could push Europe to the frontier in strategically important sectors and benefit from EU financing. #3 Building Block Finance the main areas for action, requiring massive investments unseen for half a century in Europe — such as the defense industry, cross-border energy grids, computing, and connectivity infrastructure. 🔥 To digitalize and decarbonize the economy and boost the EU's defense capacity, the total investment-to-GDP rate will need to rise by around 5 percentage points per year, reaching levels last seen in the 1960s and 70s. 💡 A 2% increase in the level of total factor productivity within ten years could already be sufficient to cover up to one-third of the required fiscal spending. #4 Building Block Reform the EU’s governance by increasing the depth of coordination and reducing the regulatory burden. 🔥 More than 60% of EU companies view regulation as an obstacle to investment, with 55% of SMEs identifying regulatory obstacles and the administrative burden as their greatest challenges. 🔥 The average timeline to decide and implement a new law is about 19 months due to outdated decision-making processes. ➡ "EU countries are already responding to this new environment with more assertive policies, but they are doing so in a fragmented way that undermines collective effectiveness." This week’s must-read for thought-provoking insights!

🗓️ #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

Towards a Circular Single Market - Free movement of goods, services, people and capital, the European Single Market, has been at the very core of the European Union for decades. It's the EU's most precious asset, and the reason why the EU has a seat at global, geopolitical tables. Now it should be made circular, for the economy, Europe's autonomy and environment, writes Enrico Letta in his seminal report to the Heads of State and Government of the EU. Check page 42 ! https://lnkd.in/dzz7u2US #circulareconomy #circularsinglemarket #greendeal #singlemarket

📰 In their latest #EPCDiscussionPaper, Philipp Lausberg, Georg Riekeles, Miguel Otero-Iglesias and Agustín González-Agote presents the main challenges weighing on the EU’s evolving regulatory environment, and accompanying them with concrete policy recommendations to address the situation: 🔸 Turn competitiveness into an overarching goal of policymaking 🔸 Make regulation more sensitive to business size 🔸 Reinforce the Single Market as a top priority 🔸 Generate greater international efforts Read the paper here 👇

🧨 This week saw the coming of the much-whispered report about the EU’s competitiveness, penned by the former prime minister of Italy, Mario Draghi. It is said that the report was even postponed until after the EU election, because of the dynamite it promised to include. The main takeaway from Mr Draghi et al seems to be that the EU and its member states need to invest, invest, invest to keep up with China and the US – a Marshall Plan for the 21st century (but bigger and more badass). 🧐 Unsurprisingly, ChemSec agrees with this. We need investments and new innovations to fuel the green transition. Here’s a golden opportunity to take the lead in the biggest business opportunity currently at stake. What we do not agree with the report’s conclusion that the EU’s environmental legislation is holding the EU’s competitiveness back. ❗ First, it states, "Europe cannot afford to remain stuck in the ‘middle technologies and industries’ of the previous century.” That’s true! But good regulation is a key tool for driving the chemical industry away from the old plastics and the forever chemicals of the 1900s and towards the next-generation, cutting-edge, safer products. 🏎️ Secondly, following Mr Draghi’s train of thought, it’s like he looks at the EU as a sports car and environmental regulations as speed bumps. “If we would just remove those damn speed bumps, we could put the pedal to the floor”. But if you constantly go full speed, the engine will finally break down. And that’s a big problem with the report: It doesn’t account for negative externalities. It only looks at the direct impact on business and industry, not the big picture. If we give industry carte blanche to pollute our continent, it will eventually come back to bite us, including the industry itself. To us it sounds like a logical fallacy to try and close the so-called competitiveness gap by taking the lead in a race to the bottom. Everyone wants businesses in the EU to flourish, live long, and prosper. But removing speed bumps and running people over is probably not the best approach. 🫵 What are your thoughts on Draghi’s report? Comment below. (News from The Guardian about the report: https://lnkd.in/dpR2MmmU)

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

💡 Today, we would like to share a summary of the key points from Enrico Letta’s report “Much More than a Market” presented on April 18th, 2024. The report outlines recommendations to strengthen the Single Market and ensure a sustainable future and prosperity for all EU citizens. It has garnered significant attention and sparked discussions among European leaders, policymakers, and experts, initiating important conversations about the future of the Single Market. Here are some key points: 1) A 5th Freedom to Enhance Research, Innovation, and Education in the Single Market: 📍Empowering research infrastructures. 📍Establishing a strong European technological infrastructure. 📍Creating a European Knowledge Commons. 📍Encou raging public-private partnerships. 📍Increasing mobility for researchers and innovators. 📍Championing open science. 📍Safeguarding researchers’ autonomy. 📍Addressing the investment gap in research and innovation 2). A Single Market to Finance Strategic Goals: 📍Creating a Savings and Investments Union to unlock the potential of the Single Market. 📍Leveraging the Single Market for green and digital industrial public investments. 📍Improving investment through circular economy, public procurement, and administrative capacity 3). Promoting Peace and Enhancing Security: 📍Toward a Common Market for the defense industry. 📍Fostering integration in space for strategic autonomy. 📍Strengthening health resilience. 📍Facilitating seamless and sustainable transportation within the EU 4).Enhancing Proposal Design and Rule Adoption: 📍Improving proposal design in the Single Market. 📍Informed decision-making for rule adoption. 📍Effective and efficient implementation of EU rules. 📍Stronger enforcement to uphold market integrity. 📍Simplifying regulations for a more dynamic Single Market 5).The Single Market Beyond Its Borders: 📍Ensuring a resilient Single Market in the new geopolitical scenario. 📍Using trade as a tool to project the Single Market’s influence. 📍Enhancing economic cooperation with strategic partners. Enrico Letta’s report emphasizes the importance of the Single Market as a catalyst for growth, prosperity, and solidarity, even beyond its original borders. If you’d like more details, you can find the full report here. https://lnkd.in/dPMppUdz Source: European Council website

"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.