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Charles Michel is president of the European Council.

Russia’s warfare in Ukraine marks a brand new geopolitical actuality for the European Union.

Within the rapid aftermath of Russia’s assault, the European Council met in Versailles, taking unprecedented motion to bolster our strategic autonomy. Right here, EU leaders laid out a plan to strengthen Europe’s protection capabilities, scale back its vitality dependencies and empower its economies by technological innovation —the three pillars of European sovereignty.

We’re additionally reinforcing these pillars by our worldwide engagement, because the EU with its member states are the primary sponsor of the multilateral system and of peace, growth and local weather change financing. As one of many principal buying and selling powers, we’re setting international requirements that replicate our values.

However now, as we work to ship on this imaginative and prescient, we have to choose up the tempo.

The challenges we face immediately are very totally different from these of the pandemic. COVID-19 was a shock that put our economies in a brief coma, however the present vitality disaster creates a brand new state of affairs. We’ll now face persistent increased vitality prices, and on prime of this, Europe’s social market financial system implies — for good cause — increased labor and environmental prices than elsewhere.

Taken collectively, this basically modifications our place in relation to our principal opponents, notably america, which stays the most important oil and fuel producer. And it forces us to rethink how we defend our competitiveness.

For many years, we’ve constructed a system primarily based on free commerce, whereas striving to make sure a degree enjoying discipline for all, which meant implementing a strict framework for state support guidelines. On the worldwide scene, free market nations have for years put stress on China to restrict state support to corporations and to play by free market guidelines. But, China continues to instantly make investments state cash in key industries of strategic significance.

With the Inflation Discount Act, our American ally has additionally lately embraced a large state support coverage to foster its inexperienced transition. And the U.S. is establishing an almost $370 billion bundle of subsidies and tax credit to create an ecosystem of key applied sciences — the exact same applied sciences that the EU is investing in.

The EU should act good, quick and on a large scale to strengthen our economies, notably by investing in clear and digital applied sciences. We should additionally reinforce our manufacturing capacities to protect our prosperity, whereas additionally guaranteeing our strategic autonomy.

As agreed in December, the European Council will tackle these challenges at our subsequent assembly in February, and we should always contemplate 4 parallel strands of motion.

First, we should give our member states extra leeway in offering state support to their companies. As our principal opponents enhance their public assist, we can’t be naïve. Shoring up assist for strategic industrial corporations and small and medium-sized enterprises means reforming, or not less than making our state support guidelines match for immediately’s financial and geopolitical realities.

But, in doing so, we should keep away from the entice of setting tailored guidelines for every member state. This is able to be lethal for our single market and for the degree enjoying discipline between corporations and member states, which has been the key to its success. 

Second, we should take full benefit of our out there funding and monetary devices – each on the nationwide and EU degree. This implies guaranteeing extra flexibility to disburse the numerous monetary technique of the EU price range and of our post-COVID-19 restoration fund, NextGenerationEU, because the overwhelming majority of those funds stay untapped — not as a result of they’re unsolicited however as a result of the procedures are sometimes too cumbersome.

Third, not all member states have the identical monetary means to handle the present disaster. Solidarity is one in every of our best European property — a protecting protect. That is very true in arduous occasions. As such, it is sensible to increase the SURE program, created throughout the pandemic to mitigate the unemployment threat. This is able to grant all member states entry to reasonably priced borrowing to assist their companies and workforce, whereas additionally preserving the integrity of the only market and its degree enjoying discipline.

Lastly, we should additionally suppose long run. Past supporting our companies immediately, we want extra non-public and public funding to shore up our industrial and technological base.

Subsequently, I suggest to construct on the concepts expressed by Fee President Ursula von der Leyen and Commissioner Thierry Breton, and look into the opportunity of an EU Sovereignty Fund for fairness funding into new and strategically essential tasks in inexperienced vitality, digital know-how and protection. The European Funding Financial institution has the remit to be the spine of such a challenge.

This fund would spur non-public funding; shut the funding gaps that undermine long-term progress; and it could additionally generate wealth. Over time, the worth of its gathered property would dwarf the liabilities incurred to finance preliminary investments. And the fund’s property may finally be bought to non-public buyers, so the fund can reinvest within the subsequent wave of technological improvements, or in different essential areas of strategic significance for European sovereignty.

Europe should stay a continent of manufacturing and innovation. Supporting our companies and guaranteeing our international competitiveness — it will require new methods of pondering and a can-do perspective from all of us. Collectively, we’re stronger, extra influential and extra sovereign.

Let’s do it.