The EU has its industry threatened by the war in Ukraine
EU leaders meeting at a summit in Brussels on Thursday will try to find a common response to help their industries deal with an energy crisis caused by the war in Ukraine and a race for American subsidies.
“The supply of cheap Russian energy was part of the economic model of many European industries. This model fell apart after the Russian-led attack on Ukraine, (…) it will not come back,” the Commission President warned. Ursula von der Leyen on Wednesday.
Moscow has cut gas supplies to the EU by 80% since launching a military offensive in February. If European supplies are secured for this winter, especially thanks to imports of liquefied natural gas, its value has exploded to a level that threatens the survival of entire sectors in the chemical and steel industries.
Mrs. von der Leyen also mentioned the American plan, adopted by Washington this summer, which envisages an investment of 370 billion dollars in favor of the fight against climate change. Behind the admirable environmental goal, the plan is protectionist, with exceptional aid targeted at firms established across the Atlantic, likely to further undermine the competitiveness of a Europe already penalized by rising energy prices.
“This law could lead to unfair competition,” Ms von der Leyen said during a speech to members of the European Parliament in Strasbourg, two weeks after French President Emmanuel Macron asked US President Joe Biden for concessions during a visit to the US.
In this delicate context, Europeans should rethink the support for their businesses, which is the main topic of the meeting of the heads of state and government of the Twenty-seven.
Unite against Moscow
The Europeans want to convince Washington to spare their alliance at a time when the war is raging on the borders of the Union. German Chancellor Olaf Scholz said on Wednesday: “We must not allow our transatlantic relations to split. Instead of arguing, we must cooperate even more closely.”
But the Europeans themselves must remain united in the face of the economic crisis. After a historic fall in GDP caused by the Covid pandemic in 2020, rising energy prices will push the EU economy back into recession this winter.
In this context, the Franco-German couple, which has been divided in recent months on energy, budget or military issues, is trying to demonstrate their unity.
Mr Scholz represented Mr Macron at the EU-ASEAN summit on Wednesday. The French president, who traveled to Doha to support the Blues in the semi-finals of the FIFA World Cup, will be in Brussels on Thursday morning for the start of the summit.
Without waiting for possible concessions from Washington, currently under discussion in transatlantic working groups, Ms von der Leyen called on Europe on Wednesday to build its own European plan.
In the short term, he proposed relaxing the state aid framework for companies and strengthening the European RePowerEU plan to promote renewable energies and divest from Russian hydrocarbons to encourage companies to continue investing in Europe.
It will also, from September, develop a European “sovereignty fund” to develop a common industrial policy and research and innovation projects on a continental scale: hydrogen, semiconductors, quantum computing, artificial intelligence, etc.
In addition to economic issues, the leaders of the 27 EU countries should reaffirm their political, financial and humanitarian support for Ukraine and condemn the recent escalation by Russia, which has begun to methodically destroy civilian infrastructure, especially energy.
“Russia is using winter as a weapon, the situation in Ukraine is serious, Russia’s systematic missile attacks on civilian targets… is causing terrible suffering to the people of Ukraine.” , his country holds the presidency of the EU Council until the end of the year.
He added that the G27 should also discuss ways to increase pressure on Moscow after the numerous sanctions already adopted, including the latest cap on Russian oil prices.
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