The European Union, administrative hell? While the Trump-Musk tandem size in public spending, American agencies and dismantles all the regulations, on this side of the Atlantic on this side, the European Commission will present this Wednesday, February 26, a large simplification plan. In the viewfinder, two guidelines: the CSRD and the CS3D which oblige companies to assess their impact on the environment and the company. A normative framework widely criticized by industrial lobbies but which was one of the pillars of the Green Deal. For the MEP and economist Aurore Lalucq (Socialist and Democratic Group) and president of the Economic Commission in the European Parliament, simplification, which is a legitimate demand for businesses, can only be an element in the reconquest of European competitiveness.
L’Express: The European Commission presents its Omnibus law this Wednesday, a vast simplification plan. Is the answer up to the promises of Ursula von der Leyen and expectations in particular of business leaders?
Aurore Lalucq: We will see what this law has in detail. What is certain is that it is not necessary that simplification, which is a legitimate demand from companies, is similar to deregulation, with a questioning of certain European pillars. Above all, it cannot be seen as the miracle solution to all European sub-competitivity problems. And there, I am worried. When I meet business leaders, what are they talking about? Obviously simplification, and they are right. But also energy prices. The Draghi report has shown very well that our competitiveness differential with the United States largely comes from the cost differences in energy on both sides of the Atlantic. But the bosses also tell me about unfair competition, especially China. And they finally point to the slowness of the response of European institutions. Concretely, this means that we must have both an anticipation shock and a shock of responsiveness. We cannot wait 12 months to 18 months and let European companies be taken from market share unfairly.
My fear is that the solution of simplification is a bit of that of ease. It is not the removal or grooming of certain regulations such as the CSRD and that on the duty of vigilance that will suddenly protect us and protect our businesses if ever, China decides to flood the European of Chinese cars. It won’t change anything, actually. It is not simplification, either, which will create the digital infrastructure we need. For that, it takes something else. And this is where I lend: we have to answer the whole Draghi report. What this report points out is our lack of industrial strategy, our lack of investment and the question of the price of energy. I hope that the Clean Industrial Act proposed soon by Commissioner Stéphane Séjourné will respond in part.
You are precisely chairing a working group in the European Parliament which is working on the responses to be given to Mario Draghi’s proposals. This report should be finalized in the coming weeks. Where are you discussions and what are the blocking factors?
Many will depend on the way in which the Industrial Act proposed by Stéphane Sévisé will be perceived. You should know that as a function of political nationalities and groups, there may be a certain reluctance to do industrial policy. And then we will also see the response of the Parliament to the omnibus law. Concerning specifically the Draghi report, what seems essential to us is to find the means of financing for gigantic investments that we must urgently launch. Because the nerve of war is to find 800 billion euros. To which should be added dozens of other billions for European rearmament. Where to find the money? Here again, the response of the Union of Capital Markets often appears as the miracle solution. But it’s a very long project. You need a unique supervisor. We must harmonize the right of bankruptcy. We need compensation chambers on European territory … I still warn: to union the capital markets will not be the solution to all our problems. It is one element among many. Everything is a matter of pipes. We have the savings of Europeans, we must manage to put investment opposite. Contrary to what we believe, the European Union does not live above its means. She lives below. We have a problem of weak demand, whether on the side of consumption or investment. Finally, you have to be pragmatism. There are sectors where there are a need for public money, others not.
This new European mandate begins with a huge economic subject: the European response to the American compressor roller. And yet, you argue that Donald Trump’s Achilles heel is just the economy …
Yes. There is something that does not “loop” in the economic equation of Donald Trump. How not to make inflation when you increase customs duties as he wishes to do? The American president maintains that the increase in customs duties will be offset by a lower tax. But that has nothing to do! The extortion capitalism that Trump is trying to set up reveals a certain fragility of America in the hollow. This is a subject that we do not point enough in Europe, but look at the weight of the American debt! It is colossal and it is a sword of Damocles on the dollar and on the financing of the American economy. Finally, look at what happened recently with Canada. When Trump was very aggressive on customs duties, the Canadian government responded very firmly saying “we too will answer”. The financial markets immediately unscrewed and Trump did partly rear machine. Look at European stock market valuations for a month, they are not doing that badly. While on the side of American valuations, some like Tesla or Amazon, are being damaged.
Everything has changed in the European landscape since the discourse of the vice-president JD Vance in Munich With the awareness that the American ally was no longer unwavering. Europe must urgently think of ensuring its safety and there too, we go on a question of financing … Is it possible with such indebted states?
We must always be very careful about how we manage public money. Because it is citizens’ money. However, the growth stability pact, let’s say it clearly, has never worked. A rule that you are forced to suspend whenever there is a crisis is that fundamentally there is a problem with the rule. So you have to see it again.
But some countries, such as Germany, Austria, the Netherlands or Finland adapt very well to this rule … Your answer is very “French” …
I am not one of those who say that there is no problem with the debt. It is necessary for political and ethical reasons always paying attention to the way in which public finances are managed. I repeat: this stability pact does not work because each time there is a problem, it is on break. Whether at the time of the 2008 crisis, whether with the Covid, or at the time of the war in Ukraine. Today, I hear the Commission say that there would be a possibility of flexibility on defense expenses. It is a first welcome step. But how do you want, when you are a country already very indebted like France, getting into debt even more? It is not reasonable. This proposal may be suitable for certain countries which are not in our situation.
Do you mean that going even more for France to finance its defense is not possible?
Yes, it’s complicated. We already have the greatest difficulty in bringing public accounts back into the nails. And there, we are told: there is no problem, you will be able to spend more by doing flexibility. Other solutions must be found. Flexibility will not be sufficient. It will take more solidarity.
Is it possible to do on defense what Europe has succeeded in the vaccine at the time of the covid? That is to say joint purchases …
This is exactly what to do. On vaccines, this strategy worked great even if Europe has taken time to start. Afterwards, can these joint purchases be financed by a new joint loan or by something else. And in this case, by what? During the COVID crisis, the EU opened the possibility for States to go through the European Stability Mechanism (MES). Created in the aftermath of the 2010-2011 European debt crisis, it aims to provide aid to States which face a risk of insolvency. At the time of the covid crisis, I have made the legal and regulatory details possible – to have access to it. We are talking about tens of billions here! Let’s use it. In the very short term, it allows us to have a solution.
Since you mention the example of the covid, Europe, at the time, bought American and British vaccines … for lack of European vaccines. In terms of defense, isn’t the risk to buy American weapons? Some countries are in favor of it …
We must favor as much as possible purchases of European equipment. It is a question of strategic autonomy, a question of sovereignty. This is true in the field of defense as in that of digital. To be able to protect our data, we absolutely must develop our own infrastructure.
Is the European defense industry able to respond to this imperative need?
Let us not be defeatists: in terms of defense, we have production capacities in Europe. Now, we must discuss very concretely with manufacturers. I am in favor of a large conference on defense with all European manufacturers around the table. With a very Gaullist strategy: planning. This does not mean doing companies! This means asking them what they are able to do and how long. And how can we help them do it. Dare to finally do economic intelligence. All the industrial groups that develop today in the world, sometimes very quickly, have come to seek talents in France and throughout Europe. Do the same: the skills that we unfortunately no longer have … We will also look for them elsewhere.
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