Macron’s Agenda for the Future of Europe
But also — Plenary, DSA, Trade, Spies
Hello! Today is Tuesday 30 April, and here is your EU news summary for the week. Feel free to share this newsletter with friends and colleagues, and follow us on Twitter and LinkedIn.
The Briefing
“We must be clear about the fact that our Europe is mortal. It can die. It can die and whether it dies or not depends solely on our choices.”
On 25 April, 7 years after his first Sorbonne speech, Emmanuel Macron returned to the university's Grand Amphithéâtre to speak about the future of the European Union. A large part of his speech was dedicated to the competitiveness of European industry.
3 PARTS • Macron's speech was structured around three main parts:
A powerful Europe — defence and border control.
An innovative and prosperous Europe — industry, competitiveness, international trade, and investment in energy, AI, defence and security.
A humanist Europe — European values and the rule of law.
Out of his almost-two-hour-long speech, the French President dedicated 40 minutes to the Europe of progress and prosperity (2), with a particular emphasis on the competitiveness of European industry.
COMPETITIVENESS • “The reallocation of production factors is happening now. The question of where the green technologies will be produced, where AI and computing capacities will be located, will be decided in the next five or ten years.”
To boost European competitiveness and make the internal market attractive, Macron called for “less over-regulation, more investments, new trade rules and better protection of European interests”.
The French president referred several times to reports drawn up by Enrico Letta and Mario Draghi. As a reminder, the European Council tasked these two former Italian prime ministers to draw up two reports — one on the internal market (Letta) and the other on competitiveness (Draghi) — in order to guide the decisions of the Member States and the next Commission.
Letta's report was presented to the Member States during the European Council meeting on 17 and 18 April, at which competitiveness took centre stage. Draghi's report will be officially unveiled in June, but the former European Central Bank (ECB) President has already presented his main conclusions in a speech delivered in mid-April.
INVESTMENT • During his speech, Macron insisted on the need to create a “Savings and Investments Union”. According to Mario Draghi's analysis, the green and digital transitions require the EU to spend 500 billion euros per year.
To fund these investments, the French President proposes the following:
1. Monetary policy. Emmanuel Macron believes that the ECB should adopt a more explicit growth and decarbonization target, supplementing its inflation target.
2. Public investment. ”The response we have had in recent years has been to give more flexibility to national governments in terms of state aid. This is not a sustainable response because it fragments the internal market", Macron said.
He reiterated his support for a new common debt issuance which several ‘frugal’ Member States — Germany, the Netherlands and Sweden — currently oppose.
In his report, Enrico Letta proposes a halfway solution in the form of a state aid contribution mechanism which would require Member States to allocate part of their national resources to fund pan-European initiatives and investments.
3. Private investment. The EU has one of the highest savings rates in the world, but these savings are not used sufficiently to help finance investment. Additionally, Europeans do not invest enough in shares and therefore do not sufficiently finance companies. Finally, around €300 billion of European savings go into the US financial system every year, according to Letta's report.
At la Sorbonne, Macron proposed two solutions to these issues:
A single supervisory system for financial markets at European level.
A change in the application of certain financial rules — in particular the Basel and Solvency accords. “I'm just in favor of putting the culture of risk back into the management of our savings”, he said.
However, the idea of a single supervisory system is not to the taste of all Member States. At the last Extraordinary European Council (17-18 April), Emmanuel Macron proposed centralizing supervisory powers in the hands of the Paris-based European Securities and Markets Authority (ESMA). But many Member States, including Luxembourg, are against it.
DEFENCE • Defence was also an important part of this Sorbonne speech.
Emmanuel Macron proposed amending EU treaties to add a European preference in strategic sectors such as defence and space. He also suggested creating a European missile defence shield.
However, the hard-hitting announcement on defence was made on 28 April, three days after Sorbonne II. The French President told the French regional press that he wanted to have an ‘open’ debate on the possibility of establishing a European-wide nuclear deterrence system, in which French nuclear capabilities would play a part.
This is not the first time that Emmanuel Macron has made this suggestion. However, Germany has never taken up on it. In France, the president's comments were poorly received by opposition parties, particularly by the right (Les Républicains), far-right (Rassemblement National) and far-left (La France Insoumise).
REACTIONS • Back in 2017, the first Sorbonne speech was greeted with caution by Angela Merkel. The speech was given just two days after the German general election, and European issues were particularly divisive among the CDU's potential coalition partners, which explains Merkel’s cautious reaction at the time.
This time, the German response to the Sorbonne II speech was more positive: “France and Germany want Europe to remain strong. Your speech contains good impulses for achieving this", said German Chancellor Olaf Scholz on X.
In France, a Figaro poll showed that only 32% of French people have been exposed to the speech. According to the same poll, two thirds of listeners were not convinced by the president's words.
This speech was much more than a simple campaign speech. Emmanuel Macron wanted to outline a French agenda for Europe.
Sorbonne II is unlikely to have a significant effect on voting intentions. The presidential party now stands at 16% of voting intentions, far behind the far-right party Rassemblement National (30%). The socialist party is catching up, with 14% of voting intentions.
In Case You Missed It
PLENARY • Last week, the final plenary session of this European Parliament legislature allowed for the adoption of several important texts:
The Platform Workers Directive.
The Corporate Sustainability Due Diligence Directive (CS3D).
The Net-Zero Industry Act (NZIA).
The reform of the Stability and Growth Pact (SGP).
The Forced Labour regulation.
The Packaging and Packaging Waste Regulation (PPWR).
The Council must formally approve these texts before they can enter into force.
DSA • On April 26, the European Commission designated Shein as a "very large online platform" (VLOP) under the Digital Services Act (DSA). For context, VLOPs and "very large online search engines" (VLOSEs) are the two targets of the DSA, the regulation aimed at reducing the spread of illegal content online and improving the transparency of online platforms.
This designation means that Shein will have to comply with specific DSA rules for VLOPs. The platform has about 108 million monthly users in the European Union, well above the threshold of 45 million to be considered as a VLOP. Shein joins the twenty or so platforms covered by the regulation’s provisions on VLOPs.
Four days earlier, on April 22, the European Commission initiated formal proceedings against TikTok under the DSA. The procedure aims to determine if TikTok violated the DSA when launching TikTok Lite in France and Spain.
In particular, the Commission suspects that TikTok Lite's "Task and Reward Program" — which allows users to earn points by watching videos, liking content, etc. — was launched without a prior risk assessment regarding online platform dependence, and without taking effective risk mitigation measures, especially regarding young users.
TRADE • On April 23, the Dutch and Polish offices of the Chinese security equipment company Nuctech were raided by the European Commission. The company produces baggage and cargo scanners at ports and airports.
The Commission suspects the company of receiving Chinese subsidies that distort competition. The investigation is conducted under the Foreign Subsidies Regulation (FSR).
The United States blacklisted the company in 2020 for "for its involvement in activities that are contrary to the national security interests of the United States."
SPIES • On April 23, the German public prosecutor's office arrested the parliamentary assistant (Jian G.) of an MEP from the Alternative for Deutschland (AfD) party. "Jian G. is an employee of a Chinese intelligence service," the German public prosecutor's office said.
This is a particularly embarrassing situation for the party currently in second place in the polls behind the CDU/CSU conservatives, since Jian G. is a parliamentary assistant of Maximilian Krah, the lead candidate of the far-right party.
Jian G. is suspected of spying on opponents of the Chinese regime in Germany and transmitting information about negotiations and decisions made in the European Parliament to Chinese intelligence services. Beijing, for its part, dismisses espionage accusations and denounces an attempt at defamation.
Maximilian Krah and his number two (Petr Bryston) are already accused of receiving bribes from the Russian propaganda network behind the "Voice of Europe" media, sanctioned by the Czech government at the end of March.
Last week, the European Parliament called on EU and Member State political leaders to respond vigorously to these interference attempts. The resolution adopted by MEPs calls on the Council to include Kremlin-supported media in the next round of sanctions against Russia.
What We’ve Been Reading
In a report for the European Policy Analysis Group, Jean Tirole, Clemens Fuest, Philipp-Leo Mengel, Daniel Gros and Giorgio Presidente make the case for reforming EU innovation policy in order to escape the middle-technology trap. A summary is available in the columns of VoxEU.
For Bruegel, Rebecca Christie, Conor McCaffrey and David Pinkus explain why they think the Letta report’s ‘best idea’ is a new pan-European retail investment product.
This edition was prepared by Maxence de La Rochère, Gianni Gaboret, Marwan Ben Moussa, Paul Healy, and Hana Rajabally. See you next week!