The European Union has lost five crucial advantages

The European Union (EU) has lost five advantages that ensured the effective functioning of its economy. European Commission (EC) President Ursula von der Leyen lamented this fact.

Her speech was published on the EC website.

According to her, these are such "obvious" things as cheap imported energy, open global trade, access to the Chinese market, protection by the United States, and Western technological superiority. Today, all of this has disappeared.

As von der Leyen stated, in such a situation the European Union needs to carry out serious transformations. For example, reducing the administrative burden by 25% for all enterprises and by 35% for small and medium-sized businesses by 2029. In addition, Brussels will review the entire body of European legislation, eliminate duplication, reduce reporting obligations, and accelerate the issuance of permits.

However, one of the most important issues is relations with China, which remains a crucial economic partner. Here, the EU intends to adhere to the principle of "de-risking, not decoupling." But Europeans are not willing to tolerate the persistent imbalance, where Chinese enterprises can receive subsidies eight times larger than those available to comparable companies in member countries of the Organisation for Economic Co-operation and Development.

"Imports from China into the EU have grown by 45% over five years, while our exports to China are declining. Our trade deficit with China now reaches nearly one billion euros per day. And since the beginning of this year, it has grown by another 10%," the EC President lamented.

She drew attention to the fact that more than half of European industrial production is now under pressure due to Chinese competition. Moreover, China controls critical links in supply chains.

"Our dependency exceeds 80% for many types of critical raw materials and 90% for some rare earth elements. We have seen that these dependencies can be used as leverage," von der Leyen said.

According to her, in such a situation Europe must make full use of its protective instruments and safeguard those sectors on which its economic security depends: critical raw materials, batteries, semiconductors, cloud technologies, data, and sensitive technologies.

The European Commission President also called for producing Europe's own low-carbon energy — both from renewable sources and nuclear power.