Thank you Madam President, dear Roberta,

President Costa, dear António,

Honourable Members,

President Costa has spoken on the broad range of topics we discussed. So allow me to build on this by zooming in on two areas which were the most prominent in the European Council. The first is geoeconomics. The second, defence and security.

Honourable Members,

A year ago, in my Political Guidelines, I spoke of the need for Europe to build a true foreign economic policy. The seismic and disruptive shift in global economic relations in the last year has made that need all the more acute. But any foreign economic policy must start at home. Because we first need to make our own economic and industrial base stronger and more resilient to shocks. And this is the work we are doing in four key areas.

First, we need to make it easier for innovative companies to grow here in Europe. Our entrepreneurs, startups and scaleups all lack access to the capital they need. This is a handicap relative to all of our direct competitors. This is why we need to speed up our work on the capital markets, build the Savings and Investment Union, and deliver on our first ever startup and scaleup strategy.

Second, we need to make Europe a better place to invest. Two out of three EU companies say that regulation is a key obstacle to investment. We need to make it easier and faster for companies. Speed and simplification. This is why we are working on our omnibus proposals for those strategic sectors. We stick to our climate goals. But we make it easier to reach them. We are agile, flexible and adaptable on the way towards the climate goals.

Third point is to make doing business in Europe cheaper. Energy costs in particular continue to be a competitive disadvantage for our industry. This is why it is so important we step up investment in grids, interconnectors and storage. That we fully implement our Affordable Energy Action Plan. And deliver on our commitment to phase out imports of Russian gas and oil by the end of 2027. It is time to turn off the tap and end the era of Russian fossil fuels in Europe for good. So: capital, speed and simplifying, energy costs down, focus on the homework at home.

Honourable Members,

Abroad, of course, we also have a lot of work to do. Turning now to the US. Since February, the US has imposed tariffs on 70% of total EU trade with the US. The scale and the scope of these measures is unprecedented. Our line has been clear. We will be firm. We do prefer a negotiated solution. This is why we are working closely with the US administration to get an agreement. And I had a good exchange with President Trump earlier this week to help move things forward. We are looking for a reliable framework – from which we can keep building our common trade. So the message is clear: We stick to our principles, we defend our interests, we continue the work in good faith., and we get ready for all scenarios. We will of course keep this House fully informed.

Honourable Members,

The reason we are working day and night to find a solution is because we believe tariffs are bad for business. And we are not the only ones worldwide. Since the start of our new mandate, we already concluded new trade deals with Mercosur, Mexico, Switzerland. We will work hard to finalise the deal with India by the end of the year, that will be an enormous opportunity, a huge market. And there will be more to come. Because the world is looking for partners it can count on, and Europe is that partner. And for us, it is a key part of our foreign economic policy, And of our competitiveness. You mentioned the enormous market in Mercosur that could be reached by our business and by consumers on both sides. These trade negotiations with these different countries can open immense new opportunities, so, yes this a moment of risk for Europe, but it is also a moment of opportunity for Europe. And it is up to us to seize it.

Let me turn to the second topic. Tonight, 728 drone attacks on Ukraine have taken place. It is the highest number in a day since the beginning of the war. If we look at this battlefield, we see very clearly that the war still rages on. The threat from Russia remains. This is the reality we must always keep in mind when we discuss defence. We cannot rely on others to defend Europe. The defence of Europe is our responsibility.

We all apprehend the urgency. We have made a huge step forward since the European Council in March. We have set out our White Paper with Readiness 2030. The ReArm Europe Plan laid out the necessary tools to deliver on the surge of investment. And we have facilitated the investment of up to EUR 800 billion in defence. The surge in European defence spending that we need is now possible. 16 Member States have already requested the activation of the National Escape Clause. This allows a substantial increase of defence expenditure without triggering an Excessive Deficit Procedure. On top of this comes SAFE – with EUR 150 billion in loans for joint procurement. 10 Member States have already signalled their intention to take up loans. I expect more to join. And this is crucial. Because defence readiness is not only about how much we spend. It is mostly about how we spend. This is why the European Council has tasked us to work on a Roadmap for Readiness, for the European Council of October. We will work with Member States to map their capability gaps, so that we have an overview, of course in close cooperation with NATO. We will identify common European projects for joint procurement, the flagships. So that Member States spend more on interoperability and more European. And we want more investment to stay in Europe, to boost our own defence industry and to have more research and development in our Member States. That is not only good for security. But it is also about creating good jobs here at home. So our defence industry must be enabled to consolidate, scale up and speed up. We expect a lot from them, that is hard work – and we should certainly not slow them down.

Let me just give you one example of us slowing them down. To authorise the expansion of an already existing defence factory, this can take over one year – we are speaking about an already existing factory. And the permit can be denied because of the size of the car park. This cannot be. And this is why two weeks ago we tabled the Defence Omnibus. This Omnibus aims to simplify a number of European rules. It will fast-track permitting, and simplify State aid rules, etcetera. Now the Omnibus needs to be agreed in Parliament and Council. And time is of the essence. Both because Russia is rearming fast, let us be clear about that. And the more we wait, the more European investment will go abroad outside the European Union.

Honourable Members,

To finish, I would like to stress that this investment is as important for our Member States as it is for our future Member States, so the candidate countries. We are talking about our common security – and our common prosperity. And this is course particularly the case for Ukraine. The speed, cost-effectiveness and smartness of their production is impressive. It started 3 years ago from scratch, there was nothing. It is amazing to see how much they built. But we also know that this highly capable defence industry is only operating at 60% of capacity. That is our opportunity. Our Member States can take their SAFE loans and procure directly in the Ukrainian defence industry. For our Member Sates it is top-notch quality, fast and cheap. For Ukraine, it is both crucial revenues. But also an opportunity to strengthen its defence industrial base. Ukraine and the EU stand together now – and we will be together in the future. With this House, with this Commission, and with all our Member States – present and future.

Long live Europe.