by Philip Blenkinsop and Anita Komuves

BUDAPEST (Reuters) – Measures to boost the European Union’s competitiveness to try to close the gap with the United States and China are even more urgent after Donald Trump’s victory in the U.S. presidential election, a declared Mario Draghi on Friday, in a context of concern about the bloc’s ability to meet the challenge.

The former US president, elected Tuesday for a second term, had warned shortly before his victory that the EU would have to “pay a heavy price” if it did not buy enough American products and had raised the possibility of imposing duties flat-rate customs duties of 10% to 20% on almost all products imported into the United States.

Mario Draghi, former president of the European Central Bank (ECB), told an informal summit of EU leaders in Budapest on Friday that the sense of urgency had increased since the US election.

“Yes, it’s true. The sense of urgency is stronger today than a week ago,” he told journalists on Friday before presenting his report on competitiveness to EU leaders. Twenty-seven.

The Draghi report, commissioned by the European Commission and released in September, says the European Union needs a much more coordinated industrial policy, faster decision-making and considerable investment if it is to keep up. economic pace compared to its competitors, the United States and China.

The former Italian Prime Minister’s comments also come after the collapse on Wednesday of the government coalition in Germany and at a time when French President Emmanuel Macron is experiencing domestic political difficulties, weakening and even calling into question the force of the Franco-German engine.

Luxembourg Prime Minister Luc Frieden stressed that no neighboring country of the Grand Duchy – Belgium, France and Germany – had a government with a parliamentary majority. According to him, the EU needs strength and not instability to meet the big challenges.

BUDAPEST DECLARATION

The EU lags behind its rivals in areas such as the energy and digital transition, due to limited innovation, heavy bureaucracy, high energy prices and reliance on electricity. China’s regard for essential raw materials, many observers believe.

European leaders on Friday adopted the Budapest Declaration, a long list of tasks with numerous deadlines, aimed at strengthening the single market, increasing capital for investment and unifying the energy market.

European Commission President Ursula von der Leyen said on Friday that the new EU executive would present plans in its first 100 days to help industry achieve carbon neutrality by 2050 and make proposals for here the month of June to expand the single market.

Mario Draghi has put the additional investment the EU needs at 750 billion to 800 billion euros a year, but the bloc’s most economical European countries have already disputed the idea that any of that comes from borrowing. common.

In this regard, the former central banker said on Friday that the most urgent issue was not joint financing but the fight against the fragmentation of the single market and capital markets.

However, discussions on the Capital Markets Union (CMU) have dragged on for a decade due to divergent national interests, economic cultures and regulations between member states.

Christine Lagarde, the president of the European Central Bank (ECB), said the EU must act urgently to create a unified system to direct private savings towards innovative companies and consider “new methodologies” to achieve this, officials briefed on the discussions said.

Belgian Prime Minister Alexander De Croo said the EU must get its act together before Donald Trump returns to the White House, explain the impact of a possible trade war between the two partners and make clear they must discuss the economic behavior of their common competitor, China.

(Reporting Philip Blenkinsop and Anita Komuves, Diana Mandiá, editing by Kate Entringer)

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