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EU Leaders Discuss Competitiveness Amid Pressure From US and China

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By Patrick Chen/John Van Trieste

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EU leaders have agreed to a general action on plan on boosting the bloc's economic competitiveness amid pressures from the US and China. But splits remain within the bloc on important topics.

Title: EU Leaders Meet for "Informal Retreat" Amid Major Challenges

 

REPORTER:

French President Emmanuel Macron and German Chancellor Friedrich Merz talk as they walk the grounds of a Belgian castle. They’re here for what’s being called an “informal EU leaders’ retreat”. However informal it may be, all the talk is about matters of grave importance for the Union’s future amid a rift with Washington, economic pressure from China and hybrid threat from Russia.

 

At this meeting, “Competitiveness” is the word of the day—with talk centered on boosting European businesses in the world.

 

REPORTER:

Today, our retreat is on competitiveness. We have a clear priority to strengthen economic growth in Europe. That is essential to our prosperity, to create quality jobs, and to sustain our economic social model.

 

REPORTER:

The leaders here agreed on a plan of action, to be unveiled in March. It deals with financial integration, improving energy grids and loosening regulations to help EU firms grow. But that’s just a broad plan: there are splits within the bloc when it comes to the details.

 

Germany and France are particularly at odds. Germany’s Chancellor Merz is among those who want a reset in ties with Washington and for further trade deals beyond the US. France wants to cut dependence on Washington and for Europe to buy European.

 

REPORTER:

Then there’s the matter of what France’s Macron has called “Eurobonds for the future”—a joint borrowing scheme he thinks could let the Euro challenge the US dollar.

 

Friedrich Merz (CHANCELLOR):  

So we have to, I would say, let's be cool on that.  

We know perfectly this choreography on Eurobonds  

that all the others jump on the idea.  

What is clear is that we need more innovation  

we need investment for innovation, so we have to finance it  

and part of it will be financed by public money  

so it's part of the technicalities.

 

REPORTER:

For Germany’s Chancellor Merz, though, the idea’s a non-starter.

 

Friedrich Merz (CHANCELLOR):  

I don't want to do so, but even if I was in favor of it, I couldn't, because the Federal Constitutional Court has made it very clear that there are strict limits to what the German government can do in that regard.

 

REPORTER:

Divisions like these aren’t new. But quickly changing times have created a sense of urgency towards forging a united strategy that hadn’t been there before.

 

REPORTER:

So what is needed?  

Less discussions, more commitment and actions.  

We have been discussing so long and I think this is the time to take the decisions because the time is precious and the time is running out.

 

REPORTER:

Though the meeting has not produced any firm decisions, it shows the EU working on securing its place in a shifting world order. And not all leaders feel the emerging splits about exactly how to do it are insurmountable.

 

REPORTER:

It is a necessity to reach agreements. We know that there are differences between the French and the German approaches, that our market should be protected, and I think everybody agrees on this. The questions is how to achieve this, and we must reach compromises. I am a pragmatic man and I do believe that both [sides] can be reconciled.

 

REPORTER:

In a few weeks' time, the world will see what these leaders have agreed on so far—and what still needs settling as the EU tries to carve a space of its own among the world’s two largest economies.