No EU sovereign fund for industry, but the Step platform will mobilize 160 billion – Corriere.it

From our correspondent
BRUSSELS We will still have to wait for the EU fund for industrial sovereignty, which was promised to counter the maxi aid plan for green industry put in place by the US administration with the Inflation Reduction Act, it is not there. In its place, the EU Commission has proposed, in the review of the EU budget 2021-2027, a Platform for Strategic Technologies for Europe (STEP) to support the development, production and enhancement of respective value chains in the Digital Technologies, Clean Technologies and Biotechnology Union. Step will be financed with already existing funds in the EU budget plus another 10 billion fresh euros with the aim of reaching mobilize up to €160 billion of investment in the next years. Step builds on existing programmes: InvestEU, Innovation Fund, Horizon Europe European Innovation Council, European Defense Fund, EU4Health, Digital Europe, leveraging additional funding from the Recovery Fund and cohesion policy funds.

The sovereignty fund has divided EU countries since talks began last December. The Frugals have never hidden that they are against taking on new common debt, arguing that Next Generation Eu was a one-off and that there are still numerous funds to be used. Nevertheless the EU Commission had promised to present a sovereign wealth fund by the summer and this promise had been one of the elements that had made him accept a relaxation of state aid rules to counter the American IRA to those countries, such as Italy, which do not have the same room for maneuver as Germany or France and which feared an impact on the stability of the internal market. The Extraordinary European Council of 9-10 February he had found a compromise by taking note of the Commission’s intention to propose, before summer 2023, a European Sovereignty Fund aimed at supporting investments in strategic sectors.

Tuesday EU Budget Commissioner Johannes Hahn in the press conference he explained that we proceed step by step. There was an idea and the idea is still alive, and so its spirit, which is to focus on those areas that we consider important for our global competitiveness due to the fact that in certain areas we must be the first mover and not the second supplier. But to be really fast, we had to change this idea or move it into a solution that is delivered immediately as an actionable deal, and this is now Step’s approach. So we don’t have to reinvent the wheel – he concluded -. All ready and we can focus on what is needed and don’t get lost in the negotiations on a new fund.

The blanket of the EU budget is short while financing needs have increased for political and also macroeconomic reasons due to the increase in interest rates: for EU priorities Ukraine, migration and innovation, we ask the Member States – announced the president of the Commission Ursula von der Leyen – the supply of an additional 66 billion euros for the European budget. The world completely changed, explained President von der Leyen, illustrating the proposed revision of the Multiannual Financial Framework 2021-2027 and the new strategy for economic security. We have seen three years of crisis – he continued – with the Russian invasion of Ukraine and its painful repercussions, such as energy prices, rising inflation, rising interest rates. We are in a completely different world compared to 2020 (when the EU budget was negotiated, ed).

The EU Commission has therefore revised its political priorities by adjusting the budget, increasing it flexibility and that of the programsand adopting a targeted approach to areas considered crucial such as migration and support for Ukraine. The Commission has proposed a financial reserve of 50 billion euros for Ukraine for the next four years, which includes both loans and transfers. On the migration front, rapid responses are needed for President von der Leyen. We propose to provide our Member States with financial support for strengthen the management of external borders. We have to work harder on ours neighborhood to support economic development. We need to more funds for Syrian refugees in Syria, Lebanon, Jordan and Turkeyfor the southern migratory route and for the Balkan onefor our partners around the world and to maintain our ability to respond to humanitarian crises and natural disasters. For all of this we are asking for an extra 15 billion euros.

The EU Commission also presented its own on Tuesday economic security strategy, which will be followed by concrete proposals. The tagline promote, protect, collaborate. the owner of the EU Antitrust, Margrethe Vestager, to get out of the ambiguity and explain that the risks we have identified reflect the behavior we have seen from some countries. It’s no secret that the Russia has inspired our concerns about energy security, as well as the China represents concerns regarding the security of technologies and the risk of technology loss. The EU High Representative Joseph Borrell Instead, he was more cautious: It’s not about China – he said -, this communication is the first step of an articulated strategy of the European Union, the Council will analyze it and evaluate its adoption. important that our partners understand our position, not a protectionist move but it responds to our need to protect our economy. The Vice President of the EU Commission Valdis Dombrovskis He specified that Brussels wants its partners around the world to benefit from access to EU markets, capital and technologies. So we propose proportionate and precise economic security actions.

In March, during a speech on EU-China relations, the President of the European Commission, Ursula von der Leyen, had already mentioned potential restrictions on some sensitive investments or exports. Numerous measures have already been taken. In early June, the EU approved the creation of a common instrument to punish any country that uses economic sanctions to put pressure on one of its members, as China did against Lithuania. Now the EU’s attention will focus on the screening of foreign investments in the EU, the control of sensitive exports and the control of investments outside the EU that could lead to technology leaks. But as von der Leyen noted, it is also about strengthening our trade relationships and supply chains and diversifying these supply chains. An example is his recent trip to Latin America, during which he promoted free trade agreements. On lithium we are 97% dependent on China but lithium originates in Argentina or Chile – explained the president -. So wise to diversify your supply channels to move away from the only route from China since the countries of Latin America rich in raw materials understand and welcome that the Global Gateway, our investment program, follows the principle that the added value remains in the country.

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