Europe in the next five years? It’s electrifying!
Competitiveness for a climate-neutral continent, migration, and defence star in new EU’s Strategic Agenda. In this issue, understand where Europe is headed.
Ursula von der Leyen is about to extend her mandate as president of the European Commission for five more years, the EU Parliament allowing.
But her appointment was not the only decision EU leaders made last Friday. They adopted the EU’s priorities for the next five years: the EU’s Strategic Agenda.
What’s in the Strategic Agenda? Two ideas dominate: the relaunch of competitiveness for Europe’s economy, and a package for a ‘strong and secure Europe’, including migration and defence guidelines.
This comes as no surprise: Concerns about the economy heavily influenced voters in the recent EU elections, polls show.
Green transition is here to stay
Despite the gains made by far-right parties, Europe’s north star has remained untouched. Leaders have recommitted to reaching climate neutrality by 2050. Their Agenda promises a ‘stable and predictable’ framework, which is formal speak for ‘there’s no backtracking on the Green Deal’.
Companies don’t like constant changes. Following the Green Deal’s long-term investment signals, companies are starting to retrofit their supply and value chains, explains Charlotte Gjedde, from the Confederation of Danish Industry. ‘If we all of a sudden scale back on some of the commitments that we made, that is a very unsafe message to send to the market and investors’, she warns.
‘Any rollback or slowing down of the transition would be economic insanity at this point. It would cause further jobs and investment leakage to the US and China’, explains Linda Kalcher of Strategic Perspectives.
Fear Of Missing Out on a cleantech industrial revolution
EU leaders see the unfolding global cleantech industrial revolution, and want to make sure Europe stays firmly on the bandwagon. After all, it’s a sure-fire way to keep high-quality jobs at home.
The Agenda itself notes as a goal ‘harnessing the potential of the green and digital transitions to create the markets, industries and high-quality jobs of the future’.
That is exactly what many business leaders have been calling for in the last few days.
More than 500 companies have signed a pledge asking the EU to ‘confirm the Green Deal’, saying it’s ‘the foundation for a competitive, secure, modern and efficient Europe’. In the last couple of months, hundreds of companies have added their stamp to the Antwerp Declaration, asking for a ‘European Industrial Deal to complement the Green Deal’.
Recently, more than 100 business leaders called on the EU to agree on a robust 2040 climate target of at least 90% emissions reductions, and to deliver plans and policies that will scale the investment needed for a just and rapid decarbonisation of their economies.
‘This moment is pivotal for Europe’, says Andrew Prag, Managing Director for Policy, We Mean Business coalition, which released a new statement on Wednesday doubling down on that idea.
Europe in the next five years? It’s electrifying!
Now, for those really into the energy transition of Europe, the Agenda paints a general but quite clear picture of where the continent is headed: leaders want an electrified future, largely ‘made in Europe’.
Some of the ideas I get, reading between the lines:
Priority #1: attract the factories of the future to European soil. Leaders will strive to get as many battery gigafactories, clean steel, EV supply chains… as possible.
A push for electrification and renewables as a way to achieve ‘abundant, affordable and clean energy’.
But nuclear remains an option for those who wish to see ‘low-carbon solutions’.
Expect more investment into grids and batteries.
Circular economy will make industries more competitive - reusing materials might be cheaper for a continent that depends massively on imports after all.
Boost for clean mobility: expect more electric vehicles, charging infrastructure, and clean public transport.
Focus on ‘prosperity’ for all - that’s Europe at its best
With policies to re-train skilled workers, and more support for all households to adopt clean technologies in the next five years, Europe’s social model will show its strength - and the Agenda highlights just that.
E3G’s Manon Dufour sees prosperity as the main job for the new president of the European Council António Costa. ‘[His] first job will be to forge a compromise to fill the EU’s investment gap and invest in its prosperity’, she says.
Momentum for Europe to flex its muscles in the race to dominate the cleantech transition is building steam, with many voices calling for a new investment fund to take the baton from the €800-billion Recovery Fund, due to finish in 2026.
‘We really need a social and climate investment plan at the EU level, building on a stronger EU budget and a successor to NextGenerationEU’, Transport & Environment’s Xavier Sol says.
In any case, take this Strategy with a pinch of salt. The Agenda is a great compass of what Europe will be up to in the next five years, but it remains a broad brush.
Next up in the EU new term’s agenda:
Dive deeper: Are we witnessing a cleantech inflexion point?
Table Media: Without an industrial deal, Europe's industry will have no future - Sabine Nallinger (KlimaWirschaft) und Christian Hartel (Wacker Chemie AG)
Euronews: EU leaders must double down on sustainability to secure a competitive and resilient future - Gonzalo Sáenz de Miera (Iberdrola), Fleming Voetmann (Velux)
Reuters: EU governments waver over Chinese EV tariffs as trade spat escalates
The Brussels Times: Green Deal must 'stay on course', say open letters to EU and Belgium
Reuters: EU's power mix in 2024 the greenest yet, industry data show
Financial Times: Market forces are not enough to halt climate change, by Martin Wolf.
Centre coalition set to hold in European Parliament despite far-right gains
It’s been a couple of weeks since the European Parliament elections took place. The far-right gained seats, but the centre majority of EPP, S&D and Renew held, although it is now thinner.
Party leaders are now looking to other groups to make sure Ursula von der Leyen is confirmed as Commission president - and to get any legislation over the line in the next five years.
The Greens are the most likely candidate to make this majority larger. ‘The only reliable, stable democratic coalition possible is with the Greens’, said a European Greens’ co-leader Bas Eickhout.
The EPP has shown some interest in dealing with ECR, but such a coalition seems unlikely as it would be unstable in terms of priorities, given diverging views. Also, any resulting weakening of Fit for 55 laws ‘would send a bad sign to business and investors about the predictability of policies’, Strategic Perspectives explain.
Also against that possibility is that Socialists have said they are out if Meloni’s party is in.
Latest reporting says Von der Leyen has so far secured 350 MEPs out of the 361 she needs.
Calendar: Coming up
4 July: UK election
7 July: second round of French Parliamentary elections.
9 to 11 July: NATO Summit in Washington D.C.
11-12 July: Informal meeting of EU environment ministers
15-16 July: Informal meeting of EU energy ministers
15-18 July: First EU Parliament plenary, likely including vote on president Von der Leyen
18 July: European Political Community meeting
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