European Commission President Ursula von der Leyen issued an urgent appeal to EU leaders and legislative bodies, stressing the need for radical steps to "dismantle the barriers" hindering the continent's transformation into a resilient and competitive global economic powerhouse. These fiery remarks came ahead of a crucial summit aimed at reshaping the economic landscape of the 27-member bloc, amidst unprecedented geopolitical and economic challenges.
Liquidity crisis and the search for capital
In her address to the European Parliament, von der Leyen put her finger on Europe’s most pressing economic wound, stating, “Our companies desperately need capital now; so let’s get this done this year.” These remarks highlight the chronic dilemma facing both startups and established European companies: the difficulty of accessing the necessary financing for expansion compared to their counterparts in the United States and China. Many promising European companies are forced to migrate to American markets in search of the liquidity and financial flexibility that the current European system lacks.
Historical background: The dream of a financial markets union
Von der Leyen's call comes amid the European Union's ongoing efforts, spanning more than a decade, to implement the Capital Markets Union. This long-awaited project aims to unify the financial markets of member states and remove the regulatory barriers that make cross-border investment within Europe complex and costly. Experts believe that the fragmentation of the European market is the primary reason for the continent's lagging behind in technological innovation compared to Silicon Valley or tech hubs like Shenzhen.
Addressing global challenges
The Commission President stressed that the current system suffers from “severe fragmentation,” noting the need to close the competitive gap with major powers. The European economy faces immense pressure as a result of the US Inflation Reduction Act (IRA), which attracts industrial investment to the United States, as well as the generous government subsidies China provides to its industries. Therefore, von der Leyen’s call to “remove barriers” is a strategic move to ensure survival in the race for economic dominance.
Antwerp Summit and New Alliances
Von der Leyen delivered her remarks before departing for Antwerp, Belgium, where she is holding high-level meetings with industry leaders and senior officials, including French President Emmanuel Macron. These meetings aim to forge a new “industrial deal” that will boost Europe’s competitiveness. Among the proposed solutions, von der Leyen suggested a pragmatic option: if consensus among the 27 member states cannot be reached, the EU could move towards strengthening cooperation within a “coalition of the willing,” opening the door to varying speeds of economic integration to ensure that necessary reforms are not delayed.
