The Week in Brussels: Spotlight on European Competitiveness

Dear readers,

On February 12, an informal meeting of the 27 heads of state and government will take place. The debate will center on how the EU can better position itself globally and internally to ensure that companies in Europe are no longer held back by bureaucracy, diverse legal frameworks, and competitive disadvantages. It is all about Europe's competitiveness – with Mario Draghi and Enrico Letta also participating, who developed analyses and proposals in this context in 2024.

European competitiveness is also the focus of the proposal by EU Industry Commissioner Stéphane Séjourné, which he outlined in an opinion piece published in several EU countries:Europe will soon prefer European companies. His goal is to protect industries in Europe with a "Made in Europe" strategy. On February 25, he plans to propose the so-called Industrial Accelerator Act (IAA), which stipulates that European funding will be granted only to companies with production in Europe. German Minister for Economic Affairs Katherina Reiche rejects the proposal and instead suggests "Made with Europe." She warns against isolationism and advocates simplified rules, faster investments, and significant reduction in bureaucracy. Additionally, she relies on an approach that combines European strengths with reliable global trading partners to enhance Europe's competitiveness.

The European Central Bank (ECB) is keeping the key interest rate at 2.0%. However, ECB President Christine Lagarde went beyond monetary policy last week and reached out to policymakers: She announced plans to provide EU member states' governments with a reform checklist to boost growth and competitiveness, for example through digital tools, market integration, and innovation. This shows that the ECB views structural reforms as a crucial lever for sustainable growth in Europe.

Tomorrow, the Mercosur Agreement, which remains frozen despite being signed, is on the agenda of the European Parliament. In January, the Parliament decided by a narrow majority to consult the European Court of Justice (ECJ) on the agreement's compliance with EU law. Parallel to the legal review, the Parliament will now vote on the bilateral safeguard mechanism for agricultural products, the so-called safeguards.

Additionally, the Foreign Affairs Council with a focus on defense is meeting in Brussels. According tothe preliminary agenda, the EU's defense ministers will discuss, among other things, support for Ukraine – with a particular focus on collaboration in defense innovation.

Yours sincerely, Freya Lemcke

To the Newsletter

© DIHK

What is happening currently in European politics? The DIHK office in Brussels provides current information on European developments with its "Report from Brussels."

Here you can find the latest issue.

And here you can subscribe to the newsletter. (Only available in German)