President von der LEYEN in Davos: "Europe is ready for change"

Summary

In this address, the speaker reflects on the evolution of global affairs over the past 25 years, highlighting the transition from optimism in hyper-globalization to the rise of geopolitical competition. Europe's strategy focuses on boosting innovation, sustainability, and competitiveness within the EU, with an emphasis on reducing dependency on foreign energy and modernizing energy systems. The speech also stresses the importance of global cooperation, particularly in clean tech, digital infrastructure, and climate change, while asserting Europe's readiness to engage with partners worldwide, including the United States and China, in a rapidly changing world.

Takeaways

• 😀 The first quarter of the 21st century has seen significant changes in global affairs, including hyper-globalization and technological advancements.
• 😀 Global trade has doubled since 2000, but trade within regional blocks is now growing faster than global trade, indicating a shift in the dynamics.
• 😀 While technological innovation continues, global challenges such as geopolitical competition, sanctions, and economic barriers have increased.
• 😀 The promise of a more integrated and cooperative world has not fully materialized, as new forms of competition and global tensions have emerged.
• 😀 Europe's social market economy remains strong, but it must shift gears to maintain growth in the face of changing global conditions.
• 😀 A new European competitiveness strategy will focus on closing the innovation gap, decarbonization, overcoming labor shortages, and reducing red tape.
• 😀 Europe plans to create a European savings and investment union to better mobilize capital and support early-stage technology investments.
• 😀 Reducing national barriers within Europe is a key goal, with a focus on making business easier and creating a single set of rules across the European Union.
• 😀 Energy independence is critical for Europe, with a strong focus on clean energy to reduce reliance on Russian fossil fuels and to create stable, low-cost energy.
• 😀 Europe aims to engage with other countries to upgrade clean tech industries, digital infrastructure, and promote mutual benefits, including deeper cooperation with countries like India and China.

Q & A

What was the global outlook at the start of the 21st century?

At the start of the 21st century, there were great expectations as the era of hyper-globalization was reaching its peak. The world was optimistic about technology, global trade, and interconnectedness, with millions of people being lifted out of poverty, particularly in India and China. The.com boom symbolized this optimism, and many believed that democracy and global cooperation would define the future.

How has the global landscape changed in the past 25 years?

Over the past 25 years, the world has seen both continued connectivity and new fractures. While global trade has doubled, trade within regional blocks is now growing faster than between them. The rise of non-market economies, technological advances, and global shocks like the pandemic have revealed vulnerabilities in supply chains, energy security, and interconnectivity.

What challenges have emerged in global trade and economic cooperation?

Global trade has faced challenges such as the rise of non-market economies that operate under different rules, the weaponization of supply chains, and the increase in global trade barriers. The cooperative world order that was once imagined has been replaced by intense geostrategic competition, with countries vying for resources, technologies, and trade routes.

What is Europe’s strategy for sustaining its growth in the next 25 years?

Europe plans to shift gears by focusing on innovation, decarbonization, overcoming labor shortages, and reducing red tape. The European Commission will present the 'Competitiveness Compass' to drive these efforts, with goals to increase productivity, enhance sustainability, and ensure that technological progress benefits all Europeans.

Why is Europe’s capital market a crucial issue for its future competitiveness?

Europe struggles with a fragmented capital market that hinders the flow of investment, especially for tech startups and clean-tech sectors. Despite having large savings, the inefficiencies in accessing capital domestically mean that European companies are often forced to seek funding abroad. Europe plans to create a European Savings and Investments Union to better mobilize capital.

What steps will Europe take to make business easier and more efficient?

Europe intends to simplify its rules for sustainable finance and due diligence, and create a unified regulatory framework for businesses across the EU. This would allow companies to operate under one set of rules, reducing national barriers and enhancing scalability, which is crucial in a global economy of large corporations.

How has Europe dealt with energy dependency on Russia, and what are the next steps?

In response to Russia’s energy blackmail during the war in Ukraine, Europe drastically reduced its dependence on Russian fossil fuels, dropping Russian gas imports by 75%. The next steps involve diversifying energy supplies, investing in clean energy technologies, and strengthening energy independence while continuing to modernize energy infrastructure.

What role does Europe’s innovation capacity play in its future?

Europe’s tradition of innovation, strong workforce, and large single market of 450 million consumers are key to its future competitiveness. The continent aims to harness its innovative potential, particularly in sectors like clean energy and digital infrastructure, and ensure that these innovations can scale and thrive in a more competitive global environment.

How does Europe plan to engage with the rest of the world amid rising global competition?

Europe is seeking to expand its cooperation with countries around the world, especially those interested in clean technologies, digital infrastructure, and mutual benefits. Recent partnerships with Latin American countries, India, and China highlight Europe’s commitment to fair trade and investment agreements that prioritize local industries and sustainable development.

What challenges and opportunities lie ahead in Europe’s relationship with China?

Europe recognizes the challenges posed by China’s state-sponsored overcapacity and the distortions it creates in global markets. However, Europe is also committed to continuing constructive discussions with China, aiming for a balanced, fair, and reciprocal relationship. The 50th anniversary of EU-China diplomatic relations in 2025 offers an opportunity to deepen economic ties while addressing trade imbalances.