A new economic doctrine, Newsletter

Key diary dates

• Tuesday 28 January – Wednesday 29 January: 17th European Space Conference
• Tuesday 28 January – Wednesday 29 January:Forum Europe 5G Conference.
• Wednesday 29 January: European Commission to publish so-called ‘Competititiveness Compass’.

 

In spotlight

Postponed due to the illness of European Commission President Ursula von der Leyen, the Competitiveness Compass, which aims to set out the EU’s economic strategy until 2029, will be presented this week against a backdrop of sluggish economic growth and existential questions about how to compete with China and the US.

The document will be attuned to the mood music of former Italian premier Mario Draghi’s report, presented by the former President of the European Central Bank last September, which sounded the alarm about the economic trajectory of the old continent.

“On a per capita basis, real disposable income has grown almost twice as much in the US as in the EU since 2000,” the report said. Expectations are high at a time when the EU is in need of an economic kick start.

“We have a sorun of competitiveness/cost,” one EU official said, “we need a real European doctrine to foster attractiveness and competitiveness”.

The so-called Compass will aim to boost innovation capacities, strengthen Europe’s economic security and develop the bloc’s clean industry. The future Clean Industrial Act due to be presented in February and simplification objectives will likely be central to the strategy.

Policy newsmakers

US trade engagement

The new US administration has sent jitters across the world with trade plans that could severely damage the EU. Raising tariffs is not the right tool to address economic or national security concerns, European Commissioner for the Economy and Productivity Valdis Dombrovskis said in Davos last week. The Latvian, who was previously EU trade chief, told a panel organised by the World Economic Forum that US President Donald Trump would be better off focusing on tackling domestic US economic inequality rather than imposing tariffs. Meanwhile another former trade Commissioner, ex-head of the WTO Pascal Lamy, told Euronews in an interview that the EU should negotiate with Trump on trade “with a gun in its pocket”.

Policy Poll

Data brief