Speaking at a Bloomberg event in Dublin, Irish Prime Minister Micheal Martin argued the European Union must rethink how it approaches innovation and technology to stop losing ground. "It's in Europe's interests that we make the big leap," he said. "Otherwise Europe as a collective entity will fall further behind, particularly when we're facing a very strong economic competitor in respect of China, and indeed the United States."
His message hits as the EU tries to protect its economic sovereignty amid sharper geopolitical splits, trade strains, and military conflicts. It also arrives as the bloc nears the two-year mark since Mario Draghi's competitiveness report, which was intended to push policymakers to act.
Martin urged movement on the EU's long-stalled Savings and Investment Union, which is viewed as key to stronger markets, easier financing for companies, and meeting spending needs such as defense and pensions. The plan has been bogged down for years by disagreements among member states over how it should function.
He put a timeline on the table, saying progress "will be possible by the end of the year," adding, "It will benefit Ireland and it benefit Europe more generally." EU leaders will take up competitiveness at their October summit, where they are also expected to highlight the economic challenge from China.
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"The danger in Europe is that we complain a lot," Martin said, pointing to the clout of US tech titans. He backed regulation where needed but argued policymakers also have to "create an ecosystem that facilitates our companies, SMEs, to scale and to become globally important companies." Europe needs "European champions," he said.
Martin also pressed for working closely with international partners on defense and industry. On the proposed Industrial Accelerator Act, he cautioned Europe "has to be very mindful that the forthcoming Industrial Accelerator Act doesn't undermine any of the existing trading agreements with other partner, including the United Kingdom." That view is likely to be welcomed in London, where the government opposes the EU's "Made in Europe" strategy, which would put European firms first in regional capital-allocation choices.
Last year, the EU's trade gap with China hit €360 billion ($418 billion), with all 27 member states contributing to the imbalance. Brussels is also increasingly worried about heavy reliance on Chinese inputs such as semiconductors and rare earth minerals.
What to watch next: EU leaders meet in October to discuss competitiveness, and they are likely to bring up the economic threat from China. Any tangible movement on the Savings and Investment Union - widely regarded as essential for bolstering markets, expanding business financing, and helping cover defense and pension outlays - would reveal the direction of Europe's economic strategy.
