Competitiveness, Lagarde’s warning: “Yes to simplification, but green and digital investments essential”

From the correspondent in Strasbourg – Europe’s real challenge is to unlock the potential that is there but untapped. According to European Central Bank President Christine Lagarde, the future of competitiveness is at stake here. “We are already home to a wealth of ideas and innovators,” she premised in addressing the plenary session of the European Parliament. “Our challenge is to turn these ideas into technologies that fuel economic growth. To do so, we must reduce administrative burdens and foster an environment conducive to innovation.”

Lagarde’s words support the simplification intentions set out in the European Commission’s competitiveness agenda, a program at the heart of criticism for a risky deregulation. The actual knot, which the ECB is not responsible for unravelling, lies in how the reduction of red tape will be translated into practice. 

The ECB will do its part to the extent that it can. Lagarde commits publicly but invites politics to do their part. “Investments must be the cornerstone of Europe’s economic transformation,” she stresses, and makes it clear that simplification does not mean calling the Green Deal into question, the agenda designed for the growth of the EU and its eurozone. “The focus must be on investment in physical and digital infrastructure, research and development, and green technologies,” she clarifies. She reiterates, “These are not optional investments but essential, necessary to drive productivity and ensure Europe’s competitiveness on the global stage.” In addition, she adds, “They will address our energy dependence and help us achieve our climate goals, both of which are urgent imperatives.”

But more importantly, it will take the courage to move forward and not give in to disruptive impulses. A message she addresses by quoting Konrad Adenauer, chancellor of the then West German among the leading promoters of the Economic Coal and Steel Community (ECSC), which later evolved into today’s EU. “Adenauer,” Lagarde recalls, “said 70 years ago: ‘European unity was the dream of a few. It became the hope of many. Today it is a necessity for all of us’.”