EU-wide industrial strategy and ‘internal labour reserves’: Hungary’s policy priorities for the bloc

EU competition chief Margrethe Vestager warns against Franco-German push to loosen merger rules to allow for “European Champions”. The European Commission Executive Vice-President Margarethe Vestager has warned against the idea of watering down internal competition rules to allow for larger European companies to compete on global markets, an age-old Franco-German idea that could gain new momentum as part of an expected “competitiveness deal” by the next Commission. The discussion is “based on the wrong premise, which is that you need to be sheltered and coddled and nurtured within Europe to make it in the global market,” she said at an event organised by think-tank Bruegel on Wednesday (19 June). “I think it’s the other way around: I think you need to be challenged to be really good”. Read more.

French Far Right’s Bardella vows ‘€2-3 billion’ cut in French contribution to EU budget. The President of France’s far-right Rassemblement national, Jordan Bardella, told business leaders on Thursday (20 June) that if he were appointed prime minister after the snap elections, he would cut the country’s contribution to the EU budget by “€2 billion to €3 billion”—something that, from a legal point of view, would be virtually impossible. “There is no reason why we should be asking everyone to cut spending […] but not ask that EU operating spending be cut too,” Bardella told a public hearing in front of a series of entrepreneurs and business associations.

One day earlier, France was hit by the European Commission’s Excessive Deficit Procedure (EDP) announcement, which worsened financial markets’ reaction to the country’s ongoing political reshuffling. EDP prospects, which would require France to undergo spending cuts, do, in fact, exacerbate concerns that the post-Macron era could see the introduction of measures that could aggravate the country’s fiscal stance.

Overall, The Commission issues formal warnings to seven member states for violating the bloc’s budget rules. The EU executive announced on Wednesday (19 June) that EDPs will be initiated against Belgium, France, Italy, Hungary, Malta, Poland, and Slovakia. Meanwhile, the defence investment exemption allowed by the new fiscal rules kicked in for Estonia, sparing the country from entering a correction procedure. Economy Commissioner Paolo Gentiloni, however, stressed that member states’ deficits overall are on a downward trajectory. “This picture conveys a message of confidence.” Read more.

Centralising cohesion policy could ‘kill’ the EU project, Vasco Alves Cordeiro, president of the EU’s Committee of the Regions (CoR), warns. As EU policymakers mull a reform of the EU’s cohesion policy that could see regional governments disempowered, Cordeiro issued a strong warning against this in an interview with Euractiv. A reform – inspired by the workings of the EU’s post-pandemic Recovery and Resilience Facility (RRF) – that would see national governments distribute the funds instead of regional ones “will kill cohesion policy, and ultimately, it will kill the European project,” he added. While acknowledging the need to reform cohesion policy, Cordeiro also defended the principle that all regions should remain eligible for EU funding, not just poor ones. “Cohesion policy is not a charity policy,” he said. Read more.

China’s use of state power to invest in and develop green technologies should have informed European policymakers’ own strategy towards decarbonising the bloc’s economy, say two former EU environment ministers. “It’s a path that we in Europe must follow,” former French minister of environment Brice Lalonde said. Former Irish minister for the environment Dick Roche emphasised the benefits of China’s state-led development of cutting-edge green technologies, including solar panels, wind turbines, and electric vehicles (EVs). “Favourable government policies set the stage for China’s rise to leadership,” he said. “Other governments could have followed the same policies, should have followed the same policies, didn’t follow the same policies.” Read more.

EU-China relations are at risk of deteriorating, European and Chinese experts say. At an event held by the European Policy Centre (EPC) on Tuesday (18 June), EPC chief executive and chief economist Fabian Zuleeg noted that in addition to a lack of “trust”, Brussels and Beijing share widely different “perceptions” on the legitimacy of the provisional tariffs announced last week by the European Commission on China-manufactured electric vehicles (EV). “I don’t think anyone wants a trade war, it is an extremely costly exercise for both sides,” Zuleeg said, “But the risk of escalation is there.” Zuleeg’s remarks were echoed by Ling Jin, the director at the department for European studies at the China Institute of International Studies, who said the EU increasingly treats China as a “systemic rival”– with the last element becoming predominant. Read more.

The trip of Germany’s Economy Minister Robert Habeck to China, then, could not come at a more useful time. Sandra Detzer, the Greens’ lead MP for economic affairs in the German Bundestag, told Euractiv. “Precisely because of the tariff disputes between Beijing and Brussels, we should now utilise all available channels of communication,” she added. While the EU executive will lead official negotiations with Chinese counterparts, Germany is particularly keen on reaching a deal with China, representing the country’s fourth-largest export market. Exports and supply chains in its car industry, in particular, would take a hit from possible retaliatory measures from China.

The Commission, however, said earlier in the week it was “not worried” by Beijing’s announcement on Monday (17 June) of an anti-dumping investigation into the bloc’s pork exports, which would hit Spain, the Netherlands, Denmark and France as Europe’s largest exporters. At the same time, with analysts and producers saying China was retaliating against the EU’s subsidy probe into Chinese electric cars, exporters were unfazed and producers concerned at the news – while Spanish Agriculture Minister Luis Planas said there is “room for negotiation”. Despite the importance of EU pork exports to China, the trend has declined in recent years, going down by as much as 23% in volume in 2023 from the previous year. 

[Edited by Alice Taylor]