Brussels, 16 April 2024
“Check against delivery”
Good evening!
Thank you very much Orgalim, and President Ormazabal, for hosting me tonight. It has been two years since we last talked. And we are in a very different place tonight. This time we are 51 days before a crucial European election. It also means that we are reaching the end of this legislative term.
And that was not any term… Clearly, the work on Europe’s green and digital transitions started long before this Commission. But what we have gone through over the last years – a pandemic that put the world on pause; a brutal war that laid bare our energy dependency; a changing geopolitical order, symbolised by some of China’s policies – all this has set our work on fast forward.
You probably know this old saying from Aldous Huxley, “that men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach”. Well, I would like to think that women and men learn from history. And certainly, we Europeans have learnt a lot about ourselves over the last years. And there is no going back to how things were before.
Let me tell a few learnings.
First, we have learnt that when circumstances challenge us, we still hold strong. That’s no small learning! Thirty years of Single Market has made Europe resist geopolitical and economic jolts. We may stumble, but we don’t fall. This is important because as we get closer to the polling stations, we hear defeatism. We hear narratives hat Europe has lost its relevance, its edge.
I say: No, it has not. A sector like yours proves it a million times. Europe is a world leader in advanced manufacturing and clean technologies.
This is proved by export data, which confirms our global standing. Europe is the largest trading continent, similar to China and ahead of the US. Our trade with the rest of the world, as share of GDP, went up both in goods and services. From about 15% in 2021 to 18% in 2022 for goods; and from nearly 7% to 8% in services.
But to reject defeatism doesn’t mean that we ignore real challenges. We hear – and we share – your call to systematically close gaps in the Single Market. Starting with creating single markets where they do not exist yet – like in telco, or in capital markets.
But unlike what we may hear, Europe does not need to reinvent itself, it needs to get back to basics: remove barriers, enforce existing rules.
And this leads me to the second learning today: we don’t a need a new industrial strategy, because we already have one. It’s called the twin digital and green transition.
Our technological shift to net-zero is our industrial strategy. It is what drives our competitiveness. There is no green transition without tech. And our capacity to make one serve the other will decide how successful we are in the next decade. You know this better than anyone because the industries that you represent power these transitions.
Recently, VDMA, the German Mechanical Engineering Industry Association, which I believe is represented in this very room tonight, shared an interesting study. It shows that 86% of greenhouse gas emissions globally can be reduced by existing technologies, but less than half of these technologies are already economically viable today.
This is a call for us policymakers. We must continue to unlock what drives growth for pretty much any business across this world – especially small and medium ones: money, skills and time.
Money first. We have the tools. With programs like Horizon Europe and the European Innovation Council accelerator, we are funding innovation. Last year, 42 deep-tech companies were selected under the EIC accelerator. They will receive 285 million euros, combining grants and equity.
11 billion euros of public investment will be directly provided to European research & development under the Chips for Europe Initiative. In total, including the Important Projects on Common European Interest on Microelectronics and Communication Technologies, over 100 billion euros of public and private investments have already been announced, for concrete projects along the semiconductor value chain. That’s money going to many small and medium businesses.
Then comes skills. Among all the work we do, I think our work to train, upskill and reskill Europe’s workforce is the one to be followed the closest. Because even with all the money, the relevant infrastructure, or the highest ambition, none of that will happen if we don’t have the people to make it happen. I am not worried that new technologies will steal jobs away for our current workforce. It will change the request to the workforce, yes. But my concern is that we may not have sufficient people equipped with the new skills needed to embrace those new technologies.
As per time, we’ve already done a lot to fast-track permitting and reduce administrative burden. The Chips Act, for instance, provides fast-tracking of permitting, and gives priority access to pilot lines, for businesses to test their innovations. But I reckon this is a space where the next Commission will have to do a lot more.
Ladies and gentlemen, when we think about our competitiveness, we think about our twin green and digital transitions. They will create the prosperity that will enable us to fulfil the third ambition, which is to have socially inclusive societies. But – and this is my third learning from the past years – we cannot drive that with subsidies.
Because Europe can never outspend the US and China. We’re not good at being American. Even worse at being Chinese. And we have no reason to. We have a European model that has already brought us this far.
This model doesn’t think competitiveness as a vertical exercise: take money, and dig deeper into public pockets to find even more money. Instead, it thinks competitiveness as a horizontal exercise: you need skills, talents, research and innovation, uncorrupted authorities, safe spaces to live, tax systems that are commendable, and so on. This is what goes into the products manufactured in Europe. Not just the hardware, not just the materials. But also the values and the model we believe in.
This is what we bet on. Rather than betting on taxpayers’ money to subsidize our economy for undefined periods of time.
Of course, we do need public aid. When the market is failing, or when it is not mature enough. Our IPCEIS are a good example of how public money can kick-start nascent technologies. When the risk is still too high for private investors to bear alone. But the aid must be necessary and proportionate.
Otherwise the risk is that subsidies end-up distorting fair competition. It’s true inside, as much as outside our borders. That’s why we have significantly geared ourselves up against unfair subsidies coming from foreign competitors.
Which leads me to the fourth and last learning today. The one that we learned the hard way. And that I think will continue to shape our relationship with the rest of the world for a long time ahead.
The Covid pandemic, and Russia’s brutal war in Ukraine, have shown us how dependent we are on third countries, for the technologies we need the most. And the raw materials we need to produce them. Tech has made our relationships more complex, with countries that can be partners and competitors within the same minute. One thing comes clear. In the global tech race, Europe has asserted its own model, and walks in its own direction. But that certainly does not mean we should – or even could – walk alone.
The work that we have done with the EU-US Trade & Technology Council to align on tech standards, to share transparent information on subsidies, to advance AI governance, is instrumental to keep a continuity between the American and the European markets – despite challenges. I think it must be continued, no matter who runs the White House.
As we further develop the strategy for clean technologies, we must reflect about the question of trustworthiness. These products become connected. And more and more, they are an essential part of our critical energy and transport infrastructure. So, we must make sure that we can trust them, and we can make sure that they uphold our values.
I think likeminded partners, starting with G7 countries, should start developing a list of trustworthiness criteria for critical clean technologies, that could be deployed in different ways. As conditions for certain incentives, when granting certification before a product is used in certain sensitive areas. Or as non-price criteria in public procurement auctions, for instance. Trustworthiness criteria would relate, among others, to sustainability or cybersecurity. I’d be keen to hear what Europe’s largest manufacturing sector thinks about such an idea.
Ladies and gentlemen, what separates us from the next mandate is a lot more than just a few months. It is the distance between regulation, and its implementation. Because with regulation, you change perceptions. But with implementation, you change behaviours.
It’s all there, but now we have to make it happen. And this cannot be done without the hundred thousand businesses, many of them small, that provide the “tech behind the tech”. And that power our move to a green, digital world. I mean all of you, of course. I know that you will continue to help shape the future in the next term, as much as you have done with us in the last one.
Thank you.
Source – EU Commission