European Union ministers see Trump as a wake-up call to fix the economy, according to Reuters

By Jan Strupczewski

BRUSSELS (Reuters) – The return of U.S. President Donald Trump to the White House is a wake-up call for European Union countries to fix their economies and become more competitive, the European Union’s top finance officials said yesterday as Trump was sworn in for the second time.

Concerns have grown over the past year that the EU-27 lost out to China and the United States in the race to acquire new technologies, especially in the race to transition 450 million people to a low-greenhouse-gas-emissions economy.

Many European innovators expand their businesses in the US, where access to capital is easier and companies are less burdened with red tape.

In China, where some firms receive large subsidies from the government to gain global market share, the Chinese industry already dominates in solar panels, electric cars, wind turbines and batteries.

“The new Trump administration should be a wake-up call for Europe,” Belgian Finance Minister Vincent Van Pethem told reporters. “Instead of focusing on retaliation[on U.S. tariffs]we need to focus on Europe’s challenges — declining competitiveness and the growing productivity gap.”

Instead of starting a trade war, the EU should boost its competitiveness and develop capital markets, officials said.

“In the wake of President Trump’s election, the best response… is to redouble our efforts to deliver on our commitments,” Pascal Donohoe, chairman of the eurozone’s finance ministers, said at a press conference.

Our special relationship

Former EU trade commissioner Valdis Dombrovskis, who is now the EU’s economic chief, is keen to preserve the EU’s special trade relationship with the US, but not at all costs.

“We need to protect these trade relations and our initial approach is to think bilaterally with the United States, but about a multilateral and rules-based trade system at the global level,” Dombrowski said.

“At the same time, if it is necessary to protect the economic interests of Europe, we are ready to do so, as we did during the first Trump administration.”

Poland’s Finance Minister Andrzej Domanski, who will set the agenda for the EU finance ministers’ meeting until the end of June, said the key to success in talks with the new US administration is for EU governments to stick together and strengthen Europe’s economic power.

“It is very important that Europe remains united,” the president said, adding that the EU should focus on lower energy prices for industry and consumers and on cutting regulations.

“We need to focus on building the strength of the European economy. We need to focus on how to reduce the cost of energy. We need to focus on how to remove such a regulatory burden from European companies,” said Domansky.

French Finance Minister Eric Lombard said the US administration should redouble its efforts to protect the EU industry.

“This is very important through the Clean Industry Act and other tools we have in Europe,” Lombard said, adding that trade is also a priority to develop new technologies, especially artificial intelligence.