Written by Jan Strupczewski
BRUSSELS (Reuters) – The return of U.S. President Donald Trump to the White House is a wake-up call for European Union countries to reform their economies and increase their competitiveness, senior European Union financial officials said on Monday. Second semester.
The 27-nation European Union has become increasingly concerned in the past year about losing out to China and the United States in the race for new technologies, especially those that would help the bloc of 450 million people transition to an economy with lower greenhouse gas emissions.
Many European innovators are expanding their businesses in the United States, where access to capital is easier and companies are less burdened by red tape.
In China, some companies receive large subsidies from the government to gain global market share, and Chinese industry already enjoys a dominant position in solar panels, electric cars, wind turbines, and batteries.
“The new Trump administration should serve as a wake-up call for Europe,” Belgian Finance Minister Vincent Van Petegem told reporters. “Instead of focusing on retaliation (against US tariffs), we should focus on the challenges Europe faces – the declining competitiveness and the growing productivity gap we face,” he added.
Instead of starting a trade war, the EU should strengthen its competitiveness and develop capital markets, officials said.
“With regard to the election of President Trump, the best response…is to redouble our efforts to implement what we have already committed to,” Eurozone Finance Minister Paschal Donohoe said at a press conference.
A special relationship with the United States
Former EU Trade Commissioner Valdis Dombrovskis, now in charge of the EU economy at the European Commission, said the EU was keen to maintain its special trading relationship with the US, but not at any cost.
“We need to maintain these trade relations and that is our principled approach, both bilaterally with the United States but also thinking about the multilateral and rules-based trading system globally,” Dombrovskis said.
“At the same time, if there is a need to defend Europe's economic interests, we are ready to do so, as we were doing during the first Trump administration,” he added.
Polish Finance Minister Andrzej Domanski, who will set the agenda for EU finance ministers' meetings until the end of June, said the key to success in dealing with the new US administration is for EU governments to stick together and strengthen Europe's economic strength.
“It is very important that Europe remains united,” he said, adding that the EU should focus on lowering energy prices for its industry and consumers, as well as reducing regulations.
“We must focus on building the strength of the European economy. We must focus on how to reduce energy prices. We must focus on how to remove such a regulatory burden from European companies,” Domanski said.
French Finance Minister Eric Lombard said that the change in the US administration means that the European Union will have to redouble its efforts to protect its industry.
“This is crucial through the Clean Industry Act and other tools we have in Europe,” Lombard said, adding that trade would also be a priority, as would the development of new technologies, especially artificial intelligence.
