Dear President,

Dear Ministers,

  • It is with great pleasure that I am speaking again to you.
  • First of all, I would like to thank Minister Horvat for his excellent role during the Croatian Presidency of the Council that comes to an end later this month – we all know that it has been a particularly testing period. So thank you very much again – we deeply appreciate your effort.
  • At our last meeting a few weeks ago, we had discussed the need for a recovery plan. This plan is now on the table.
  • This plan combining Next Generation EU and the long-term budget is historic both in its volume and in its political, institutional and budgetary architecture.
  • Today, we must switch to a new phase, with decisions to be made on how to take concrete, innovative and also unprecedented measures.

[The financial package]

  • I told you at our meeting in May: faced with a symmetrical shock affecting all of Europe, the answer could only be European. One based on solidarity and leveraging the full strength of our Single Market. One that guarantees a level playing field within Europe, and a level playing field also vis à vis the US and China. This point is extremely important.
  • To guide our financial response, we carried out a comprehensive assessment of the liquidity and investment needs per industrial ecosystem, which we published with the proposal for a Recovery Plan on 27 May.
  • Our comprehensive proposal matches the scale of the diagnostic.
  • I am sure you have all seen the numbers: we propose a new instrument – Next Generation EU – to raise €750bn on the financial markets, two thirds of which in grants and provisioning of guarantees; and the rest in loans that can be mobilised at the request of Member States.

[The mechanisms]

  • The types of needs we identified were varied. This is why we designed three forms of intervention, 3 pillars:
  • The first pillar will focus on supporting Member States to recover, repair and come out stronger from the crisis, based on a partnership with Member States, who will have the responsibility to draw up national recovery and resilience plans, to be financed by the Recovery and Resilience Facility. The aim will be in particular to support the twin digital and green transitions, in line with the priorities identified in the Recommendations of the European Semester.
  • The second pillar is about kick-starting the economy, by mobilising private investment through loans and equity in key sectors via:
    1. a solvency support instrument, under EFSI, to help the recapitalisation of companies that are most at risk.
    2. the reinforcement of InvestEU,  in particular for investments in sustainable infrastructure to speed up the green transition.
    3. a new strategic European investment facility under InvestEU to support European resilience  and investment in strategic industrial chains, notably those linked to the green and digital transition.
  • The third pillar consists in a top-up by Next Generation EU of certain EU programmes – such as Horizon Europe, RescEU – and the creation also of a new health programme (EU4Health) to draw the lessons of the COVID-19 pandemic.

[Implementation]

  • Beyond the structure and the figures of the package, today let us focus on the issues that will concern us most, all of us, in the months ahead: how are we going to use this firepower efficiently, not only to repair our economy but also – and that is extremely important – to transform it?
  • How will we ensure that this package delivers for the next generations, by leaping forward rather than staying in the past? How will we ensure a European approach to these investments?

[Ecosystems]

  • As you know, in preparing the needs assessment to inform our Recovery Plan, our services so far identified 14 industrial ‘ecosystems’, representing around 90% of the business value added in the EU. They are fundamentally pan-European and capture continental economic interdependencies in all their complexities, ranging from manufacturing activity, to public and private services, in both physical and digital realms. 
  • The ecosystem approach can help us identify the repair and investment needs, as we have done, but also to identify areas in which investments can have the greatest value added and hence benefit Europeans the most.
  • This approach also allows us to better identify and address the bottlenecks – physical and digital – that still exist in our Single Market, as was discussed during this week’s meeting of the Single Market Enforcement Taskforce.
  • Let me be clear: we have identified the repair and investment needs per ecosystem (and I would encourage you to draw inspiration from this assessment) and we are putting financial tools on the table.
  • But the Commission is not proposing a recovery budget allocation per ecosystem. It is up to you, Member States, to define your priorities, through your national recovery plans, depending on the structure and the needs of your economies.
  • This needs to happen quickly.
  • Once you have proposed your national recovery plans, the Commission will enter into a dialogue with each one of you in order to assess that the investments proposed are in line with the different political objectives we collectively agreed upon (as part of the Green Deal, the Digital Strategy, the Industry Strategy ) and the recommendations from the European Semester. In this way, the Commission will ensure coordination at European level and make sure we all pull in the same direction. This is important, because as we saw during the crisis, all the industrial ecosystems are interconnected in the Single Market, so your investment decisions will have ramifications for other Member States.
  • I hope we can continue to exchange views on the preparation of national recovery plans here in the Competitiveness Council.

[Recovery as transformative process]

  • However you choose to invest, one common priority we should all have in mind is the opportunity – not to say the necessity – to leverage this recovery into a transformative process.
  • We need to use this historical package to accelerate our green and digital transition, while increasing at the same time our economic resilience and geopolitical strategic autonomy.
  • Let me provide some other examples of how I think we can collectively come out stronger from the crisis.
  • We need investment in the digital sector:
    • Connectivity: Investments for more and better connectivity everywhere in Europe. For example, in rapid deployment of 5G and providing the necessary bandwidth for health, education, transport, logistics and media. This includes investment in 5G corridors for major transport paths.
    • Technology: Investments in artificial intelligence experimentation facilities, cloud infrastructure, supercomputers (including hybrid and quantum computers) and blockchain services, but also, following recent events, microprocessors.
    • Data economy: Investment in common European data spaces in key industry sectors and areas of public administration. In particular, we should build a common European health data space, which would facilitate data sharing and support the development of the health sector. This needs to translate into the capacity to develop, in Europe, cloud solutions for the upcoming wave of industrial data. 
    • We will support such investment and provide a regulatory framework that is fit for purpose (implementation of the 5G toolbox, proposals on Artificial Intelligence, proposals on data governance, a new Cybersecurity Strategy, the new Digital Services Act – so we are working heavily on all these topics).
  • We need to invest in making our industry ecosystems green, digital and resilient, and support this transition with the right policy framework. We have already had ample opportunity to discuss how we can achieve this for tourism, so let me provide some other examples of how I think we can collectively come out stronger from the crisis.
    • In the construction ecosystem, where millions of SMEs have been hardly hit, you could consider using instruments such as InvestEU, Structural Funds and EIB support in order to accelerate investments in digitisation, innovation and energy efficiency. You could also invest in affordable housing and social infrastructure, as well as recycling platforms for construction and demolition waste. There is also particular potential to digitise the construction sector. Today, 70% of construction firms dedicate less than 1% of their revenues to digital tools. We need to explore digital solutions for example in public procurement and permitting processes. I would also like to make sure that there are no regulatory or standardisation barriers in the way of relaunching and modernising the construction ecosystem.
    • In the automotive, transport and mobility ecosystem, a number of you have already linked shorter term funding to specific objectives for the greening, automation and circularity of the automotive ecosystem. We will continue to back such efforts and support EU's technological independence with regard to batteries and hydrogen. Clean hydrogen and renewable low carbon transport fuels could have a tremendous impact beyond the sole transport sector. This crisis must become an accelerator to develop the necessary technology towards clean transport.
  • I could continue ecosystem by ecosystem, but given time constraints I will start to wrap up.
  • To drive these strategic cross-cutting innovations or technologies, I believe that the model of Industrial Alliances is particularly adapted. It has shown great results already for batteries and plastics, and should be extended to other areas such as raw materials and hydrogen. This is something I would like to discuss with you in the future, here in the Competitiveness Council, since political leadership is crucial for the success of these Industrial Alliances.
  • In sum, besides supporting the sectors which are at high risk, we must transform and prepare the future. I strongly encourage you to give priority in your National Recovery Plans to investments in critical green and digital enablers to make our industry more competitive and increase the resilience of our economy.

[Resilience]

  • Indeed, before I conclude, I would like to stress that our recovery will not be lasting if it does not lead to more resilience.
  • The crisis has revealed many vulnerabilities, in crucial areas for our sovereignty. Health, of course, but also in key technologies.
  • That is why resilience is at the heart of our Recovery Plan, with a new strategic investment instrument within InvestEU that will mobilise, in addition to our sectoral programmes, up to €150 billion in investments. 
  • We also have to make sure our companies are not made vulnerable by the crisis and predation by non-European players. We should strengthen FDI Screening in the EU to better protect the security and public order in our most strategic sectors.
  • And we need to safeguard our Single Market from the potential market distortions brought on by foreign subsidies. Next week the Commission will publish a White Paper, which will pave the way for a new legal framework to give ourselves the means to act. Especially when it comes to foreign companies benefitting from distortive subsidies by third countries trying to take stakes in our industry or to win large infrastructure contracts on our public procurement markets. 
  • But this is not about a defensive agenda. We do not suggest cutting ourselves from global trade.
  • Quite the contrary: we aim for an offensive approach to better equip ourselves for the global competition, based on the strength of our Single Market and a competitive edge in the twin green and digital transition.
  • Without isolating ourselves from our partners and without engaging in protectionism, the current situation suggests that we should increase our collective capacity to promote our own values and interests.

[Conclusion]

Dear President,

Dear Ministers,

  • We need to move forward quickly.
  • Our companies, our citizens and workers cannot wait. They also need visibility on the EU political priorities over the longer term.
  • None of us can do it alone. We will need to discuss, to coordinate and exchange experiences throughout this process. I am convinced the Competitiveness Council will play a key role in this regard.
  • Today, I look forward to discussing with you our recovery priorities and how you envisage the best way to achieve them.
  • Thank you.