Minister Urso,

Dear Emanuele Orsini,

Dear Fabrice Le Saché,

Ladies and gentlemen,

It is a great pleasure to be here with two of the engines of Europes industry and economy. Not so long ago, there was a belief that rich economies would inevitably move away from making things – and turn instead to services. But Europe did not follow that path as far as others. Manufacturing still accounts for around 16% of the EUs value added – compared to just 11% in the United States. And it supports around 30 million jobs – more than twice as many as in the US.

Today, we are glad we have kept our industrial strength. Because it gives us an invaluable foundation for the future. A foundation to lead the next wave of innovation – as advanced technologies reshape the way we produce. And a foundation to meet our growing need for security in a more hostile world – especially at a time when dependencies are being instrumentalized. And in this effort, Italy and France are at the forefront.  Whether in defence or in energy, you are helping turn Europes industrial strategy into reality – when we need it most. At the same time, it is clear that European industry is facing strong headwinds. Some are coming from outside: The impact of tariffs and conflicts, or trade distortions, or disrupted supply chains. But some we have – at least in part – created ourselves: From high energy prices and heavy regulatory burdens, or we can also call it red tape. To a lack of capital – and a lack of access to it. We need to stand up for our interests – in a world where others are doing exactly that, no longer bound by the same rules. But we also need to look inward – and remove the barriers that are holding us back. So on both fronts, my message today is simple: Europe gets it. And Europe is on it.

Ladies and Gentlemen,

When the new Commission took office, I promised that we would put competitiveness at the heart of everything we do. And that is why we have developed a new economic and industrial strategy. One that brings Mario Draghis report on competitiveness to life. And there are three key pillars that I believe are essential to delivering on Europes industry: Simplification and speed. Investment and innovation. Trade and tariffs. Crucially, these are not standalone actions – they are three pillars of a single, very coherent strategy. So let me take each in turn and explain how they work together to support European industry.

The first pillar is about making our internal market work better. We are operating in a tougher external environment. And that is a challenge for an economy like ours – where exports account for almost one fifth of our value added. So 20 % of the products we produce in the European Union are exported. But Europes most important trading partner is Europe itself. Almost 65% of our trade happens within the region including the UK, Norway, and Switzerland. So if we unlock the full potential of our own market, we can offer our companies a safe harbour. And we can spend far less time worrying about what others choose to do. That is where simplification and speed come in: A point I hear very often from industry – perhaps more than any other – is the need to clear the obstacles that make it hard to do business in Europe. 

Today, EU companies spend around 2% of their turnover just to stay compliant. That is half as much as they spend on energy – even after the energy shock. This is why simplification is at the center of this Commission. And let me be clear on the spirit of our simplification efforts. Our climate goals remain unchanged. Because to plan your investment, you need predictability, not political zick-zacks. But there is a difference between setting clear targets – and overloading businesses with bureaucracy. A good example is our simplification of the Carbon Border Adjustment Mechanism. Let me give you a few figures on that one. It is a system that protects you from the unfair competition of heavy polluters. But, I understand, it was creating too many reporting obligations that were unsustainable for small firms and small mid-caps. So, we are exempting 90% of companies from CBAM. But these companies are responsible for less than 1% of import volumes and emissions. So, the climate impact of this measure is minimal. But the relief for SMEs and small mid-caps is massive. This is how our simplification packages work – the famous “omnibus” packages.  We have already proposed six of them – including on defence and just yesterday in Strasbourg, we added the omnibus for the chemical industry. And we will propose more to target the most strategic sectors.

The second pillar of the strategy is investment and innovation. Europe is a world leader in innovation, and we should always be aware of that. We publish nearly a quarter more research papers than the United States. And we are increasingly translating that innovation into production. The share of EU firms adopting advanced digital technologies, especially AI – is now rising in line with the trend in the US. But we also know that long-standing barriers are still holding our companies back from investing fully in the regions future. Of course, the simplification agenda will help, but we must also tackle the other obstacles that stand in the way. Close to 8 in 10 firms cite high energy costs and the shortage of skilled staff as major barriers to investment – with the most dynamic firms most likely to feel the strain. That is why we are working on an Affordable Energy Action Plan – focused on expanding access to low-cost, low-carbon energy, and on building a connected internal market through grids and interconnectors. A true Energy-Union.

And it is true, if we look at the Energy Union, the emphasis must be on the low carbon energies that grow here at home in Europe. Because what is driving the prices up is the import of fossil fuels and our dependency on the volatility of the global markets. The more we produce energy here at home, the more we are independent, the more we have energy security, and the more good jobs. So that is about the Energy union that is so urgent, to bring the prices down and to have access to energy.  And of course, we are also proposing a Union of Skills. I know how important it is for you to have skilled personnel. We want to better match business demand with a skilled workforce, and to mobilise talent across Europe.

The next issue is capital. Businesses will need significant financing to make the transformational investments our economy demands. It is estimated at over EUR 800 billion per year. And here in Europe, we are fortunate: the money is there. We are the worlds best savers. But companies still face a fragmented landscape when it comes to accessing those savings. And this is especially a problem for young, innovative firms.  Over the past decade, EU scale-ups have raised, on average, 50% less capital than their counterparts in the US. That is one reason why more than half of the worlds unicorn companies are in the US – and fewer than 10% are in the EU. So, as Mario Draghi has pointed out: the most urgent priority is to improve access to capital. This is why we are setting up the Savings and Investments Union. And it is why we are working on a Scaleup Fund to help bridge the financing gap of deep tech scale-up companies. But public investment is also important – not only to help bridge but also to crowd in and de-risk private investment. This idea will be at the heart of the new long-term budget that we will present next week – the so called MFF – for seven years and in this proposal will be in particular the European Competitiveness Fund. This fund and the new budget will catalyse maximum financial firepower in strategic sectors. From artificial intelligence to space, from cleantech and biotech to defence. This is to the benefit of the entire Single Market. It will have simple rules, and attract private and public investment across the entire lifecycle of a project. This is how we can help bring our industrial strategy to life.

Ladies and gentlemen,

The third pillar of our strategy – and perhaps the most topical – is trade and tariffs. Over the last months, I have listened to our businesses. And their message has been crystal clear. They need certainty and predictability in transatlantic trade. That is why our priority is to stabilise the situation with the US. It is our most important trade and investment partner – accounting for 20% of all our exports. That is worth roughly 3% of our GDP. And millions of jobs on both sides of the Atlantic depend on it. This was a point I underlined in my recent phone call with President Trump. And it is central to our negotiations. 

We are working non-stop to find an initial agreement with the US – to keep tariffs as low as possible, and to provide the stability that business need. Because we believe tariffs are a lose-lose. A tax on industry. A tax on people. But we are also not naïve, we know the relationship with the US may not return to what it once was. That is why we are also working hard to strengthen and diversify our trading relationships with others. 80% of our trade is with partners other than the US. And we already have the largest network of free trade agreements. We have agreements with 76 countries. And now, in a world battered by global volatility, we see that more countries are turning to Europe. 

Just to give you a few figures: Since December, we have concluded a new wave of trade deals, from Mercosur to Mexico to Switzerland. We are working with India and Indonesia, with the Emirates and Thailand, with the Philippines and Malaysia and the Pacific - the famous CPTPP. They all want to deal with us – because they are looking for something we can offer: We are reliable, we play by the rules, our industry delivers the quality they need, and because doing business with Europe is good for business.

And this, ladies and gentlemen, brings me back to where I started. In the first seven months of the new Commission, we have set out the most ambitious agenda for European competitiveness in decades. But the real work is only just beginning – and you can count on us to follow it through. At the same time, Europe counts on you. Whether through our strategic dialogues that we have installed – on everything from defence and cars to chemicals or energy intensive industries – we want to work together with industry for Europe. So that the future of your industries continues to be: Made in Italy. Made in France. And Made in Europe.

Thank you very much, and long live Europe.