Dear Alexander Hoffmann,
I am very pleased to be here with you today to discuss with you and the group executive committee. Competitiveness is the European Commission's main concern. I have just come from Cyprus, where we discussed this intensively in the European Council. These are the subjects concerning us: how to deepen the common internal market, strengthen innovation, push forward with digitalisation, cut red tape, create a single capital market, reduce energy prices and, above all, develop trade relations.
The war in the Middle East is hitting our economy and people hard, and they need relief quickly. At European level, we have already created new flexibility for State aid and have already given the green light to Germany. But it is important to me that, in our current crisis management, we learn lessons from the last energy crisis. Because this is the second energy crisis in four years. In 2022, Putin cut off our supply of Russian gas, and now it's the Strait of Hormuz that's been blocked. The short-term lesson was that measures must be carefully targeted at those who need them most urgently. Secondly, they must be time-limited. And thirdly, we need Europe-wide coordination so that we can leverage our market power and don't create competition for ourselves on the world market. In the medium term, we must recognise that our heavy dependence on imported fossil fuels makes us vulnerable.
Since the beginning of the crisis in the Middle East, we have paid EUR 27 billion more for gas and oil imports without receiving a single molecule more of them. We must reduce this dependency, which means that we need to develop the cheaper energy that we ourselves produce here in Europe. That means that every kilowatt-hour of energy produced here contributes to economic stability, affordability and thus Europe's independence. That is why many European countries, such as Finland and Sweden, are focusing on a combination of a whole range of renewables and nuclear energy. These energy sources are produced in Europe, are much less harmful to the climate, and nuclear delivers baseload capacity. The new small modular reactors, in particular, are opening up new possibilities. Not only the US and China but also Japan, Canada, the UK and South Korea are researching and investing in these small modular reactors (SMRs). For us it is important that the way forward allows technology neutrality in energy. For that reason, the European Union is promoting a huge roll-out of renewable energies, batteries and modern networks, and investing in research in small modular reactors.
Another area in which we are competitive is supporting businesses through new trade partnerships. Over recent months, we have signed a number of important free trade deals, opening up new sales markets and securing important supply chains for our companies.
After 25 years of negotiations, we have managed to sign a free trade agreement with Mercosur, Latin America. After 10 years of negotiations, we have signed a free trade deal with India, and thus 1.4 billion people, a huge market. Four weeks ago I was in Australia, where we also concluded a free trade agreement, and in a few weeks I will be travelling to Mexico. This gives the EU the largest network of free trade agreements in the world. And every single deal makes us less dependent.
Access to markets and affordable energy are important location factors. But we also know that much more is needed for our competitiveness. Cutting red tape is therefore also another key issue. Our work is based on three pillars.
First, the now well-known 'omnibuses'. We have launched 10 omnibus packages at European level. Three of them have been adopted. But seven have still to be finalised by the Member States and the European Parliament, so that the relief actually reaches businesses. We are talking here, after all, about EUR 15 billion every year. Our aim is to cut administrative costs by EUR 37.5 billion in total. Second, we are systematising what we call 'spring cleaning' or 'deep-house cleaning'. In other words, we are cleansing the existing legislation of redundancy, overlap and inconsistencies and so on. Third, 'simplicity by design' for new legislation – learning from the past for future legislation.
An example of the new approach to company forms in Europe is EU Inc. It is for young companies that want to grow within Europe's single market and discover that there are very different rules in the 27 Member States. In other words, it is very difficult for them to cut through this undergrowth. That is why we are proposing a new legal framework – the 28th regime – in which businesses can be started up within 48 hours. The entire process will be able to be done digitally, from anywhere in the European Union, at a cost of less than EUR 100. The new legal form facilitates the acquisition of the necessary capital. It not only creates legal certainty for young emerging firms, but also gives them access to 27 Member States, and thus also to 450 million people. Quickly, digitally and with the same rules in all 27 Member States. The basic idea of this is 'One Europe, One Market'. That is why, on Friday, we signed a roadmap with the Council Presidency and Parliament – 'One Europe, One Market'. It commits all three institutions to speeding up the removal of barriers in the single market, with clear time frames and milestones. Each in its own area of responsibility. So that the single market finally achieves its full potential. By the end of 2027, all the major obstacles should have been cleared.
The last issue that I want to address is defence. We Europeans must invest more in our own defence. That has not only been proved by the crises of recent years. It is also a basic condition for our European independence.
Europe must be able to stand up to external pressure. Both to blatant military blackmail and to the increasing hybrid attacks that we are experiencing. A clause on this – Article 42(7) – is already enshrined in the European Treaties. All Member States are already required to provide mutual assistance within the European Union. In other words, it is not a question of 'whether'. The question is how we shape the 'how' and 'by what means'. Through its size, its geopolitical position at the heart of Europe and its industrial strength, Germany, in particular, plays a major role. It is about providing the necessary capabilities and capacities, filling gaps. Both industrial and military. From air defence, to drone technology, to cyber. Only then will we be capable of responding. Only then will we be credible. Only then will we be able to stand together for peace and security in our continent. I am looking forward to the discussion in the group executive committee.
Many thanks, once again, for the invitation.
