Welcome to Better Europe’s weekly update on EU Affairs.
MADE IN EUROPE… OR MADE WITH EUROPE?
Earlier this week, the debate over Europe’s economic sovereignty resurfaced in Brussels. The Commission was preparing its long-awaited (or should we say, long-delayed) Industrial Accelerator Act, expected to introduce a form of “European preference” in strategic sectors. But even before its publication, rumour had it that the slogan had already evolved. What started as “Made in Europe” quietly became “Made with Europe”, reflecting internal divisions within the Commission over how far Brussels should go on economic protection. Countries with trade agreements with the EU would remain in the game, provided reciprocity is respected. By Wednesday, the verdict was in. Commission Executive VP Stéphane Séjourné presented what he called a “doctrinal shift” in EU industrial policy. The plan introduces European preference in public procurement, subsidies and large foreign investments in strategic sectors such as batteries, electric vehicles and steel. But not everyone is convinced — European Council President António Costa already urged caution, warning that any European preference should remain targeted and proportionate.
SÁNCHEZ CHALLENGES THE DEREGULATION PUSH
The debate over Europe’s competitiveness after Mario Draghi’s report is far from settled: ahead of the next Summit on 19 March, Spanish Prime Minister Pedro Sánchez circulated a ten-point “non-paper”, offering an alternative vision to the shorter document previously floated by Friedrich Merz and Giorgia Meloni. The major difference? In a letter to Council President António Costa, Sánchez cautions against reducing the competitiveness agenda to deregulation and quick fixes. A “truly successful competitiveness strategy”, he argues, cannot sideline social cohesion or the Green Deal in the name of regulatory simplification. His eight-page proposal broadly echoes Draghi’s recommendations, including the parts left on unread by many politicians: deepen the Single Market, keep decarbonisation at the core of EU competitiveness, and scale up investment at European level. Madrid also pushes back against calls from Berlin and Rome to loosen state-aid rules, arguing that strategic investments should be financed collectively at EU level. Among the ideas: an EU budget reaching 2% of GDP, further steps towards capital markets integration, and a potential timeline bringing the digital euro forward to 2028. That’s a breath of fresh air in deregulation-driven Brussels.
FINANCIAL MARKETS INFRA DEBATE BECOMES POLITICAL
OK, so you know what the Industrial Accelerator Act is now. And probably that a 28th regime is coming in two weeks. But have you have heard about the MISP, a major part of the SIU? Well, here we go: the MISP, or Market Infrastructure and Supervision Package, is a massive initiative to change the plumbing of financial markets and help deliver the SIU, the Savings and Investment Union. To do so, MISP makes changes to 19 laws in a process that was referred to as an ‘omnibus’ until someone on the top floor of the Commission’s Berlaymont building gave that word a different meaning about a year ago. Discussions have started at technical level but have increasingly caught the interest of EU leaders since their Summit at Alden Biesen castle which designated the SIU as an essential building block for the EU’s strategic objectives. So, when Finance Ministers meet next on Tuesday, they will have one shot to ensure their views end up in the Commission’s ‘One Europe, One Market’ roadmap, due 19 March. What’s on the table? The usual: how far to simplify and deregulate without accelerating us into the next financial crisis!