Ursula von der Leyen has this morning delivered her State of the Union speech. Despite what she said, the picture is not pretty.
Although it sounds like a trope, the European Union is standing at a crossroads: Brussels needs to decide whether it wants to remain a luxurious pre-retirement home for mediocre politicians, or if its personnel is going to match its ambitions.
A first step in this direction would be to refuse the current President of the European Commission, Ursula von der Leyen, a second term. The European Union under her leadership has lacked any true strategic vision and spent too much time on the pursuit of unrealistic projects like the European Green Deal, which are increasingly harming the future wellbeing of millions of Europeans.
Germany, the home country of Ms von der Leyen, is currently running the Green Deal as a national experiment with catastrophic consequences. Her own European Commission had to cut the Euro-Zone Outlook for 2023 from 1.1 per cent growth to 0.8 per cent because the German economy is beginning to drag the rest of Europe down with it.
At the moment, the productivity of the German economy has stagnated at 2007 levels, the construction sector is imploding, producer sentiments are hitting record lows, energy intensive industries are collapsing, and 43 per cent of companies want to move production abroad.
So far, everything we saw from the von der Leyen presidency indicates that she wants to pursue policies that would make the German approach the European standard.
Take, for example, the fact that she spoke and sponsored a conference in the European Parliament titled “Beyond Growth,” where politicians and academics got together discussing a degrowth agenda for the European people. It is one thing to have politicians who are overwhelmed by their office, but quite another if they actively promote the impoverishment of their own people and the deindustrialisation of an entire continent.
Fortunately, there are some member states who are increasingly aware that the EU needs a course correction.
Poland, for example, has recently filed a lawsuit against parts of Brussels’ climate policies and the attempts to ban cars with an internal combustion engine. But pressure comes from other areas as well: Contrary to the promise of Europe becoming a solar superpower, European PV solar panel producers are halting production or filing for bankruptcy due to competitive disadvantages with Chinese suppliers.
The von der Leyen EU seems to believe that Europe’s way to prosperity is taxation and regulation, but not production and innovation. Such an approach resembles the preferences of the Brussels’ bureaucracy that is increasingly detached from the economic realities of the emerging new international order.
The recently announced “India Middle East Europe Economic Corridor” as a competitor to the Chinese led Belt and Road Initiative so far exists on paper only. And if experience is any guide, there is a never a lack of announcing ambitious goals, but always a lack of effective follow-through.
Some of us still remember the EU’s Lisbon strategy of 2000 with its lofty goals: By 2010 Europe was supposed to be “the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion.” All of this sounded good, but never came to pass.
As it turned out, as long as the US were the sole superpower ensuring global trade and low energy prices, Europe could maintain its wealth with minimal efforts.
US consumers were more than willing to absorb the production of export nations like Germany, even if it often led to negative consequences for the American working class. Those days are now over: As the Inflation Reduction Act demonstrates, the United States might have switched Presidents, but “America First” is alive and well.
Economic populism is surging in Washington, and supported by the power of the US Dollar, the shores across the Atlantic are looking ever more seductive for European companies. Although the Biden administration is planning to spend billions on their own version of a Green New Deal, the US government is also funding nuclear and shale, turning the US into a preferred destination for energy intensive industries.
The EU needs a leadership that is capable of answering these challenges in kind, cancelling green delusions and push for a path of energy independence and reinvigorated competitiveness. Obviously, a President who promotes a degrowth agenda is not suited for such a task. It is time for someone else.