February EU Manufacturing Production YoY -5.4%
Capital Markets Union (CMU) Construction Issue Rekindled
Exchange of Support and Aid Opinions for War Countries
The European Union (EU) will hold a special summit on the 17th (local time). Discussions are expected to cover a wide range of topics, starting with measures to enhance competitiveness through the revival of Europe's struggling manufacturing sector, as well as support for Ukraine and consideration of additional sanctions on Iran.
A senior EU official told reporters in Brussels, Belgium, a day before the summit, "This summit will focus on Europe's competitiveness and economy." He added, "There are numerous factors making the European economy difficult, including high energy prices and social costs caused by geopolitical crises, as well as subsidies poured in by competing countries," and explained, "Discussions will kick off on the so-called 'European Competitiveness Deal.'"
In this regard, former Italian Prime Minister Enrico Letta is scheduled to present a special report at this summit, commissioned by Belgium, the EU's chair country for the first half of the year. The report is known to contain concrete proposals for Europe to regain competitiveness as a single market. The European Commission, the EU's executive body, also commissioned former European Central Bank (ECB) President Mario Draghi last year to prepare an advisory report on European industrial competitiveness. Draghi's report is expected to be released around June.
The reason why "competitiveness" has become the core agenda of this European summit is interpreted as a rising sense of crisis over the EU's manufacturing sector falling behind in global competition. According to Eurostat, the EU's statistical office, manufacturing production in the EU decreased by 5.4% year-on-year as of February. Earlier, the European Trade Union Confederation (ETUC) also released research showing that one million jobs have disappeared in the European manufacturing sector over the past four years.
At this summit, the issue of establishing a "Capital Markets Union" (CMU), which was effectively halted due to disagreements among member states in the past, is also expected to be re-discussed. The Capital Markets Union is a concept to integrate the capital markets of the 27 member states to lower investment barriers between countries and facilitate easier financing for small and medium-sized enterprises.
Charles Michel, the President of the European Council, also sent a letter to the 27 countries ahead of the summit, stating, "EU companies are blocked by financing barriers and face difficulties accessing new capital for business expansion and innovation," and appealed, "Progress in the long-delayed Capital Markets Union discussions is essential."
Furthermore, an exchange of views on the Middle East, where tensions are escalating, is also expected. Based on the results of an emergency foreign ministers' meeting held the previous afternoon, additional sanctions against Iran are anticipated to be considered. The official also said that the summit is expected to reaffirm the EU's unwavering support for Ukraine and discuss ways to expand support for the weapon systems Ukraine needs.
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