Europe must set sail: Von der Leyen on fierce competition on world stage

Europe will counter major powers such as the U.S. with a new strategy. European Commission President Ursula Von der Leyen says Europe is in a “race against time” to tackle global challenges such as climate change and seize the opportunities of AI, among others. In her speech at the World Economic Forum (WEF) in Davos, she addressed the new strategy.

Von der Leyen first looks back at the past 25 years. This century, she says, began with great expectations. As supply chains expanded worldwide, hundreds of millions escaped poverty, especially in India and China. With Russia as a new member, the G7 became the G8, and democracy seemed on the rise. In the European Union, introducing the euro was about to bring our economies and societies closer together. The global economy was reaping the benefits of all these developments.

Fierce competition on the world stage

However, the cooperative world order we envisioned 25 years ago has not become a reality. Instead, we find ourselves in an era of fierce geostrategic competition.

Innovation is flourishing, with breakthroughs in artificial intelligence, quantum computing, and clean energy that will dramatically change the way we live and work. At the same time, controls on technology have quadrupled in recent decades.

The world's largest economies are competing for access to resources, new technologies, and trade routes. From AI to clean technology, quantum computing to space travel, from the Arctic to the South China Sea - the race is on. Even the networks that connect us, such as undersea data cables, have become targets - from the Baltic Sea to the Taiwan Strait.

As this competition intensifies, economic instruments - such as sanctions, export controls, and trade levies - will increasingly be used.

A strong, competitive, and sustainable future for Europe

To ensure our growth over the next 25 years, Europe must step up a gear, Von der Leyen said. That is why the European Commission has asked Mario Draghi to prepare a report on Europe's competitiveness. Based on this, there will be a roadmap: the Competitiveness Compass, which will guide the next five years.

A liquid capital market

European companies struggle to access finance because Europe's capital market is fragmented. Every year, €300 billion in European savings goes abroad, hindering the growth of innovative companies and the cleantech sector.

That's why the European Savings and Investments Union is being created, she announced: a targeted approach to help investments flow seamlessly through our union.

A better entrepreneurial environment

It also addresses the fragmentation of the single market. Businesses still have to deal with 27 different national legislations. This is why the 28th regime is being introduced: a single uniform set of rules for business law, bankruptcy law, labor law, and taxation across the EU. This will make it easier for companies to operate on a European scale.

A secure and sustainable energy supply

Before the war in Ukraine, Europe was largely dependent on Russian energy: 45% of our gas, 50% of our coal, and much of our oil came from Russia. This energy was cheap but made us vulnerable to blackmail. When Russia cut off its gas supply, Europe acted quickly: our gas imports from Russia fell by 75%, oil imports are now only 3%, and we no longer get coal from there.

This turnaround shows that we need a structural overhaul of our energy supply. Europe will continue to invest in clean, reliable, and affordable energy so that we remain independent and strengthen our competitiveness.

With these three pillars - capital, entrepreneurship, and energy - we are building a stronger and more resilient Europe, Von der Leyen said.

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