Thank you Madam President, dear Roberta,

President Costa, dear António,

Honourable Members,

President Costa has addressed the various topics we discussed. I would like to focus on two significant areas from the European Council: geoeconomics and defense and security.

Honourable Members,

A year ago, in my Political Guidelines, I emphasized the need for Europe to establish a solid foreign economic policy. The recent shifts in global economic relations have heightened this necessity. However, any foreign economic policy must begin with strengthening our domestic economic and industrial base to withstand shocks. We are addressing this in four critical areas.

First, we must facilitate the growth of innovative companies in Europe. Our entrepreneurs, startups, and scale-ups struggle to access necessary capital, which puts us at a disadvantage compared to competitors. Therefore, we need to accelerate our efforts on capital markets, establish a Savings and Investment Union, and implement our inaugural startup and scale-up strategy.

Second, we need to enhance Europe as an investment destination. Two-thirds of EU companies identify regulation as a major barrier to investment. We must streamline processes for companies, focusing on speed and simplification. We are working on omnibus proposals for strategic sectors, maintaining our climate goals while making progress toward them efficiently.

Third, we must reduce the cost of doing business in Europe. Rising energy costs remain a competitive drawback for our industries. Its crucial to increase investments in grids, interconnectors, and storage, fully execute our Affordable Energy Action Plan, and phase out imports of Russian gas and oil by the end of 2027. Its time to cut ties with Russian fossil fuels permanently. Thus, our focus must be on capital, speed, cost reduction, and strengthening our foundations.

Honourable Members,

Internationally, we have much work to do. Regarding the US, since February, tariffs have been imposed on 70% of total EU trade with the US. The extent of these measures is unprecedented. Our position is clear: we will stand firm but prefer a negotiated solution. We are collaborating closely with the US administration to reach an agreement, and I had a productive conversation with President Trump earlier this week to advance this effort. We seek a reliable framework to enhance our common trade, and the message is clear: we uphold our principles, defend our interests, and prepare for all scenarios while keeping this House informed.

Honourable Members,

We work tirelessly to find solutions because we believe tariffs harm business. We are not alone in this view. Since the beginning of our new mandate, we have secured new trade deals with Mercosur, Mexico, and Switzerland. We aim to finalize a deal with India by year-end, presenting enormous opportunities in a vast market. More opportunities are on the horizon as the world seeks reliable partners, and Europe is that partner. This is integral to our foreign economic policy and competitiveness. The expansive Mercosur market presents immense opportunities for our businesses and consumers. While this is a time of risk for Europe, it is equally a moment of opportunity that we must seize.

Now, let’s discuss the second topic. Today, there were 728 drone attacks on Ukraine, the highest in a single day since the war began. The conflict continues to escalate, and the threat from Russia persists. We cannot depend on others for Europe’s defense; it is our responsibility.

We recognize the urgency and have made significant strides since the European Council in March. We have released our White Paper on Readiness 2030 and the ReArm Europe Plan, which outlines the necessary tools for increased investment. We have enabled investment of up to EUR 800 billion in defense. Sixteen Member States have activated the National Escape Clause, allowing substantial increases in defense spending without triggering an Excessive Deficit Procedure. Additionally, the SAFE initiative provides EUR 150 billion in loans for joint procurement, with ten Member States indicating their intention to utilize these loans. This is essential as defense readiness is about how we allocate resources, not just how much we spend. The European Council has tasked us with creating a Roadmap for Readiness for the upcoming Council meeting in October. We will collaborate with Member States to identify capability gaps, ensuring close cooperation with NATO. We aim to pinpoint joint procurement projects to enhance interoperability and ensure more investments remain in Europe, boosting our defense industry and fostering research and development in our Member States. This is not only beneficial for security but also for creating quality jobs locally. Our defense industry must be empowered to consolidate, scale up, and accelerate. We have high expectations, and we should not impede their progress.

Let me illustrate a current hindrance: authorizing the expansion of an existing defense factory can take over a year, and permits can be denied for trivial reasons, such as the size of the parking lot. This is unacceptable. Hence, we recently introduced the Defense Omnibus, aiming to simplify numerous European regulations to fast-track permitting and streamline State aid rules. The Omnibus now requires agreement in Parliament and Council, and time is of the essence, especially as Russia rapidly re-arms. The longer we delay, the more European investment risks moving outside the EU.

Honourable Members,

In conclusion, this investment is crucial not only for our Member States but also for future Member States, particularly candidate countries. It pertains to our collective security and shared prosperity, especially for Ukraine. Their production efficiency is remarkable, having developed significantly in just three years from nothing. However, we know they are operating at only 60% capacity, presenting an opportunity. Our Member States can utilize their SAFE loans to procure directly from the Ukrainian defense industry, ensuring high-quality, fast, and cost-effective solutions. For Ukraine, this means crucial revenue and a chance to bolster its defense industrial base. Ukraine and the EU stand united now and will continue to do so in the future—with this House, this Commission, and all our Member States, present and future.

Long live Europe.