Von der Leyen: EU must start using private capital

The European Union must find ways to utilize the vast private capital to remain competitive in the global market, stated Commission President Ursula von der Leyen on Tuesday in Strasbourg.

– The time has come for a systematic solution that will mobilize vast private capital in Europe as public investments are not enough – said von der Leyen in her speech to Members of the European Parliament during the discussion on the results of last week’s extraordinary EU summit. The summit was dedicated to the competitiveness of the European economy.

Although the European Union has successfully navigated through two major crises, the pandemic and the Russian war against Ukraine, it has nonetheless left a mark on its competitiveness, added the Commission President.

– The business model of a large number of European industries was based on supposedly cheap energy from Russia and trade with a rising China. Today we are faced with a rogue Russia and China struggling with domestic demand – said von der Leyen.

The first priority for the EU is to complete the Capital Markets Union, which was launched ten years ago but is still unfinished. With a functional Capital Markets Union, the EU could invest €470 billion annually in private capital, says the Commission President.

Three key issues

She emphasized that at the last summit, the Commission received a clear mandate from the heads of member states to propose solutions for three key issues to complete the Capital Markets Union. The first is the harmonization of national bankruptcy rules, followed by the creation of cross-border savings products for small investors and strengthening oversight at the European level over the largest market players.

The second priority is reducing energy costs, where the EU is recording good results. Von der Leyen said she expects a decrease in gas prices following numerous investments in LNG projects.

– This opens up space for further development of renewable energy sources – said von der Leyen, adding that the EU produced more electricity from wind power than from gas for the first time last year.

As the third priority for strengthening competitiveness, she mentioned addressing the issue of labor and skills shortages in the labor market. In this regard, it is necessary to train and equip every young unemployed person, increase the share of women in the labor market by creating affordable and quality childcare, good schools, and flexible working hours for parents. It will also be necessary to offer more flexible solutions for people in their third age and attract talent from outside Europe.

For the EU, global trade is also important, which must be fair, with equal conditions for all.

– We need global equal conditions. And we need to address the risks that come with openness. We need, for example, tools to address the problem of overproduction outside the EU. I am talking about structural overproduction, which is largely achieved through subsidies, and this surplus has to go somewhere – says von der Leyen, adding that others are fighting against this by closing their markets, and given that the European market is open, it becomes an attractive destination and European producers are at risk of being pushed out of the market.