Promoting competitiveness of the EU will include innovation, Green Deal, economic security - Dombrovskis

RIGA - Promoting the competitiveness of the European Union, which is one of the priorities of the current European Commission, will include bridging the innovation gap with the United States and China, ensuring that the Green Deal does not become an excessive burden on the European economy, and economic security in Europe, the European Commission's Executive Vice President for An Economy that Works for People Valdis Dombrovskis (New Unity) says in an interview with LETA.

Regarding the work on bridging the innovation gap, Dombrovskis said that EU investments in science and innovation relative to the economy were smaller than the in the United States and China. This means that funding for research and innovation development needs to be increased. The situation in Latvia is particularly dire, with one of the lowest levels of funding for science, innovation and research in the EU, said the commissioner.

There is also the question of how innovations are passed on to the real economy. There are many startups in the EU, but many of these companies fold in five years since their establishment, while those that are growing often choose to move to the United States or China, in part because there are better financing opportunities there. It is therefore also a question of access to finance for innovative startups, said Dombrovskis.

The second key issue, according to the commissioner, is achieving the Green Deal objectives and how this affects Europe's competitiveness.

"We are not abandoning the objectives of the European Green Deal, including climate neutrality in 2050, but it is clear that, in cooperation with business, we need to assess how these objectives are achieved and whether it can be done at lower cost and with less burden on the European economy," Dombrovskis said.

A strategic dialogue on the future of the EU automotive industry has been launched, said Dombrovskis. On the one hand, there are the decarbonization requirements, which are essentially a move toward electro-mobility, and on the other hand, there is very fierce competition from China and the influx of electric cars manufactured there. As a result, the European automotive sector is facing very significant challenges. Similarly, strategic discussions on the future of the Common Agricultural Policy already started last year.

The third major cluster of issues concerned the EU's economic security, including avoiding over-dependence on resources and raw materials.

"A few years ago, we had to deal with the problems that had arisen because of the high dependence on Russian energy supplies, in particular natural gas. Now, as we move toward a green and digital economy, it is important not to create new dependencies because we know that China dominates the world in terms of many critical raw materials, accounting for 80 percent to 90 percent of global supplies. So it is important to diversify these risks," Dombrovskis said.

It is also necessary to think about technological development to ensure that EU innovations do not fall into the hands of regimes that are unfriendly to Europe, such as Russia. It is also important to harness the potential of the EU's single market to remove barriers and allow the European economy to develop better, and to match the skills of the workforce to market requirements, said Dombrovskis.