Europe urged to strengthen industry amid global competition

The newly elected chair of the European Parliament's Economic and Monetary Affairs Committee has warned that Europe must strengthen its industrial base to compete effectively with the US and China. She emphasized that Europe currently lacks a cohesive strategy to support its green and digital sectors, unlike its global competitors who utilize all available economic tools to achieve their goals. The chair highlighted the urgency of this issue amid rising global trade tensions, particularly following the European Commission's decision to impose provisional tariffs on Chinese electric vehicles, which has led to retaliatory actions from Beijing. In a recent report, Mario Draghi pointed out that the EU faces an 'existential challenge' from both China and the US, stressing the need for Europe to decide whether it wants to be a continent of consumers or manufacturers. The chair expressed concerns about the potential consequences of deregulating banking, warning that such actions could jeopardize the entire economy and harm competitiveness. She criticized the increasing focus on the Capital Markets Union (CMU) as the primary means of financing the necessary transitions, arguing that a fully integrated CMU may not be capable of meeting all investment needs. Additionally, she noted the significant political resistance among member states regarding financial supervision and the harmonization of tax and insolvency laws. Ultimately, the chair concluded that public investment will be essential to achieve the levels of funding required for the green and digital transitions, indicating that overcoming various obstacles will be crucial for Europe's future industrial strategy.