Visitors to Brussels might be surprised at the change in tone from Eurocrats. Mario Draghi’s report on competitiveness is required reading. “Green transition” is out, and “security” is in. Three Commissioners-designates have the word security in their job titles.
The Commission re-configuration was designed with Donald Trump’s return to the White House in mind and it reflects a changed Europe in a changed world. Europe needs to embrace, not demonize tech — as it confronts the reality of a looming trade war and weakening of the comfortable US security umbrella.
For optimists, the election outcome may be a blessing in disguise. European governments could muster the courage to make bold decisions — such as agreeing to joint borrowing to boost the bloc’s defense industry. The UK could rejoin at least the bloc’s tariff-free zone, smoothing talks for a defense and security agreement.
Under President Joseph Biden, the EU was on speaking terms with the US on tech, introducing the Trade and Technology Council. The dialogue helped coordinate sanctions against Russia.
The EU should immediately engage the new Trump Administration in a high-level tech dialogue, to head-off separate approaches to each European capital seeking to exploit differences in national positions.
Europe faces steep challenges in stepping up. Its policymakers long ignored security when writing rules. National security remains a national competence. Views on security and on how to use the EU budget vary. There is no consensus on China’s tech ambitions or on long-term support for Ukraine. Plans for European digital sovereignty are unrealistic in the short-term and potentially terminal for long-term innovation ambitions.
Get the Latest
Sign up to receive regular Bandwidth emails and stay informed about CEPA’s work.
But crisis concentrates minds. Many of the changes clamored for by the bloc’s Nordic and Baltic digital frontrunners, including less rule-writing, more tech adoption, and substantial investment in secure infrastructure, are now planned. European Commission President Ursula von der Leyen’s personnel selections, the content of her instructions to the new team, and the general embrace of the Draghi Report indicate a new focus. Von der Leyen’s letters to the incoming Commissioners contain dozens of references to security, sovereignty, and resilience. While the green agenda has not been abandoned, it gets reduced billing.
The message is clear. Europe needs to stand on its own two feet when it comes to defense, trade, and technology. The Draghi Report on competitiveness, while not perfect, lays out both the scale of the challenge and response required. Recommendations from Enrico Letta’s report on the Single Market also feature in the mission letters.
The reports represent useful touchstones. To lead a revival in European competitiveness, the Commission will have to change gears. The Brussels machine has proven world-class in writing rules for mostly US, ‘big tech’ firms. That machine must now be put to work in rational implementation of EU rules, leading investment, and making the Digital Single Market a reality.
The appointment of a Finn, Vice President-designate Henna Virkkunen, to lead technology policy fits the new security-focused agenda. Finland is recognized as a digital leader and security is a feature of policymaking in a country with a large, bellicose neighbor. Together with Commission Vice President-designate Teresa Ribera, Spain’s candidate, Virkkunen is tasked with finding a way to encourage competition within the EU, meet the EU’s digital sovereignty goals in cooperation with other democratic partners, and support the EU’s collective ambitions for European tech to compete globally.
National governments will insist on their say on security. There are deep divisions. No consistent European position exists on dealing with China, especially on trade and technology. If President Trump withdraws or reduces support for Ukraine, the EU and its members will have to find the money or watch Ukraine fall. Real concern exists about a costly, global trade war which the Commission is already planning for. The incoming Trade Commissioner, Brussels veteran Maroš Šefčovič, now has “economic security” in his lengthy job description.
The money matters. The new Commission will be responsible for the EU’s next seven-year budget. Draghi’s report calls for €800 billion in spending with a focus on strategic technologies. The EU could substantially increase its overall budget or issue joint debt, but even that would not be enough to hit the mark. Much of the money will have to be reallocated from the Cohesion Fund, which pays for infrastructure in less well-off Member States, and from agriculture handouts. If that happens, expect robust discussions at the European Council, and tractors on the streets of Brussels.
The path is fraught. Workarounds must be found to allow a small group of governments to progress. The first step to a solution is to acknowledge the problem and the new Commission has taken the early decisions to inject security into European tech policy. Donald Trump’s second presidency will force it to accelerate in this new direction. The cavalry will not be coming.
Ronan Murphy is Director of the Digital Innovation Initiative at the Center for European Policy Analysis.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.
Read More From Bandwidth
CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy.