The leaders’ discussions on Thursday will be dominated by the pressing issue of how to stop the European Union’s economic collapse and recover, which is the bloc’s economy lagging behind that of China and the US.
Europe’s economy has had numerous difficulties in recent times, ranging from supply chain interruptions caused by the coronavirus pandemic to an energy crisis resulting from Russia’s incursion into Ukraine.
However, the biggest obstacle may yet lie ahead: the digital and renewable energy transitions, which Brussels has prioritized for the upcoming years, would need an additional yearly expenditure of around 620 billion euros ($660 billion).
The European Union is rapidly lagging behind other global powers in terms of innovation, spanning from computer chips to batteries, from artificial intelligence to solar panels.
The EU has been put further on the back foot as China and the United States have ploughed billions of dollars of state aid to prop up their critical industries.
What is needed is “radical change”, former European Central Bank chief Mario Draghi said during a speech in Belgium on Tuesday, pointing to “other regions (that) are no longer playing by the rules”.
“Our major competitors are taking advantage of the fact that they are continental-sized economies. We have the same natural size advantage in Europe, but fragmentation is holding us back,” Draghi added.
The former Italian premier, who is being tipped to take Ursula von der Leyen’s place as head of the European Commission, will report on the matter in the summer.
The bloc’s economic slowdown has continued for more than 18 months, according to official EU figures. According to data released by Eurostat last month, the EU economy expanded by just 0.4 percent in 2023, compared to the 2.5 percent growth in the US and the 5.2 percent growth in China.
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