ECON: Funding Europe's industrial and technological resurgence? 

EUobserver takes a deep dive into the workings and new chairs of every single European Parliament committee for the new 2024-2029 session, in a series of articles first published in our print magazine of October 2024

With the publication of Mario Draghi’s long-awaited report, Europe’s competitive and technological disadvantage compared to the geopolitical giants has become impossible to ignore. And the key issue in coming years will be the return to industrial policy, and finding the investments needed to fuel it.  

“The Draghi report has set the tone for this new mandate,” confirmed Aurore Lalucq, the French S&D chair of the ECON committee. “It clearly shows that if nothing is done, the European Union is at risk of facing an ‘agonising decline’.” 

This means that the “next five years will be essentially focused on economic issues,” she said, because “years of underinvestment” have left Europe “weak.” This weakness was compounded by the Covid-19 pandemic and the invasion of Ukraine by Russia.

“Therefore, one central issue of this mandate will be to find ways to finance those much-needed investments,” she said. A key initiative requiring funding will be the Clean Industrial Deal, set to be presented this autumn. It embodies how climate policy is evolving to focus more on economic growth and industrial strategy, building on the regulatory groundwork laid by the Green Deal.

But Lalucq emphasises: “This term will also be a moment for consolidation and implementation and I will pay due attention to avoid dismantling what we have achieved during last term.”

One of these achievements has been climate regulations. “We need to pay real attention to the temptation of deregulation,” she warned. “I am afraid people reading the Draghi report will only pick and choose what they see fit to their personal interest. 

“Already, we can hear a number of stakeholders calling for more flexible, prudential rules in the banking and financial sector,” she said, referring to corporate sustainability reporting rules for non-financial companies. 

The implementation of the rules is meant to be phased in from 2026 onwards, but some national politicians, including Germany’s justice minister Marco Buschmann, want to reopen negotiations to lower the reporting burden. And the EU Commission has also announced plans to cut back reporting requirements by 25 percent. 

“According to them, the EU is over-transposing rules, [which is] causing competitiveness issues for European companies,” she said. “But the  EU is actually at risk of not being compliant with the international framework for banks according to the EU top regulators.”

“Deregulation is not a miracle solution to foster economic activity. Targeted investment is,” Lalucq explained. “I have said it over and over again: the real risk posed to competitiveness is that of a new financial crisis. This is why we must do all in our power to prevent it from happening.” 

In her role as committee chair, Lalucq is calling for a “real confrontation of ideas”. If the EU is to become an economic and political leader again, it must first “find the investment needed to finance these ambitions.” 

Lalucq concludes: “The Draghi report has shed a bright light on what could happen to us if nothing is done. Now we need to work towards finding concrete and viable solutions to prove this prophecy wrong.”

The ECON coordinators are: Markus Ferber (EPP, Germany), Jonás Fernández (S&D, Spain), Enikő Győri (PfE, Hungary), Johan Van Overtveldt (ECR, Belgium), Stéphanie Yon-Courtin (Renew, France), Kira Marie Peter-Hansen (Greens/EFA, Denmark), Jussi Saramo (The Left, Finland), and Rada Laykova (ESN, Bulgaria).