Intense Rivalries

In an increasingly globalised world, countries like South Korea, Israel, the USA, and China are investing heavily in research and development relative to their economic output, striving to secure future competitiveness. This trend has sparked a debate about Europe's competitive edge, with reports by Mario Draghi and Enrico Letta emphasising the need for comprehensive reforms to enhance Europe's competitiveness.

Germany and Europe, as a whole, need a strategic foreign trade policy to promote international economic partnerships and maintain global competitiveness. One such opportunity lies in the completion of the European Single Market, which, with a banking and capital markets union, could lead to significant efficiency gains.

However, the landscape is not without challenges. An increase in public debt in some European countries could jeopardize Europe's debt sustainability. To counteract this, the EU and Germany need to make forward-looking decisions when prioritising budgets and provide incentives for companies to invest in research and development.

More private capital is crucial for addressing major challenges such as strengthening Europe's defense capability and transitioning to climate neutrality. The high outflow of capital from Europe, particularly to the USA, could be reduced with these reforms, making more capital available for investment within the EU.

The Konrad-Adenauer-Stiftung, a respected think tank, supports the topic of competitiveness with numerous publications and events in Germany and abroad. They advocate for a competitive tax system, moderate energy prices, well-trained professionals, and an attractive immigration system for qualified immigrants as crucial for creating attractive framework conditions for businesses.

In this context, it's worth noting that successful economies are characterised by a thriving research and innovation landscape. Emerging economic partners, such as China, India, Brazil, and other rapidly developing countries, challenge Europe's competitiveness in various regions worldwide. Yet, it's encouraging to see that China, once an imitator, is now transitioning to an innovator.

Maintaining Europe's competitiveness is not just about keeping up with the Joneses. It's about creating a prosperous, sustainable, and innovative future for all European citizens. As such, it's a topic that warrants continuous discussion and strategic action.