The industries’ message was timed to land just before EU leaders gather in a Belgian castle on Thursday for an informal “retreat” to thrash out a plan for how Europe can compete economically with China and the U.S.

International News via Reuters:

Top business leaders urged the European Union on Wednesday to act urgently to bring down energy prices, saying that was key for European industries to compete with the U.S. and China.

The industries’ message was timed to land just before EU leaders gather in a Belgian castle on Thursday for an informal “retreat” to thrash out a plan for how Europe can compete economically with China and the U.S.

“The next five years will be the most challenging for Europe’s industry in many decades,” CEOs gathered in the city of Antwerp said in a written statement.

“While the situation is dire, the outcome is not inevitable. We can overcome, if you act,” they told the EU leaders, calling for a package of emergency measures to cut energy costs in Europe, and support demand for “made in Europe” products.

The statement was signed by hundreds of CEOs, including the world’s biggest chemical producer BASF and Europe’s biggest steel company ArcelorMittal, as well as several energy groups.

COSTLY ENERGY

Asked what his main message to EU leaders was, Jon Morrish, CEO for Europe of Heidelberg Materials, told Reuters: “Number one, on energy prices, that they must come down. They must take us seriously, and they must realize that that is really hampering Europe’s competitiveness.”

Cement-maker Heidelberg, whose home market is Germany, was starting to move some investments out of Europe due to high energy prices, he said.

Swiss specialty chemicals maker Clariant CEO Conrad Keijzer told Reuters: “Why is Europe so much behind compared to the rest of the world? It’s the energy situation.”

The loss of cheap Russian gas imports following Moscow’s 2022 full-scale invasion of Ukraine hiked bills for many energy-intensive industries. Congested power grids, national taxes and the EU’s CO2 emissions price also contribute to power prices – which for industries in Europe are more than double those in the U.S. and China, EU data shows.

HIGH TAXES

European Commission chief Ursula von der Leyen told the Antwerp summit that she agreed EU countries needed to better link up their power grids, among several proposals to reduce energy bills.

“While energy costs are going down, national taxes on energy are going up. And the taxes that industry pays on electricity are 15 times higher than taxes on gas. This is just wrong,” she said.

NO QUICK FIX

Yet, some companies also acknowledge there is no quick fix, in part because modernising power grids to ensure that cheaper low-carbon energy can flow freely across the bloc will take years.

The EU’s electricity system is designed so that the last power plant needed to meet total demand sets the power price. Often, that is a natural gas plant – leaving many consumers exposed to gas prices, which are significantly higher than in the U.S.

Political will to change that system is scarce. EU governments decided against redesigning the market when they updated the EU’s energy rules in 2024. They have also failed for five years to find the unanimous approval needed to reform EU-level energy tax rules to give low-carbon sources an advantage.

Philippe Kehren, CEO of chemicals multinational Solvay, said the sector now wanted leaders to intervene directly to guarantee stable power prices – potentially by setting a regulated price for industry.

“I don’t see any other option, frankly speaking. … Industries cannot cope with super-volatile, high-level electricity prices,” he told Reuters.

Reporting by Kate Abnett; Additional reporting by Jan Strupczewski and Alex Chituc; Writing by Ingrid Melander, Editing by William Maclean, Mark Porter and Aurora Ellis

WTO members are considering a programme of reforms ahead of a ministerial conference in Cameroon in March

International News via Reuters:

The head of the World Trade Organisation on Wednesday urged members to consider major reforms and hold discussions on its core Most Favoured Nation concept, as trade ructions threaten the global trade watchdog’s relevance. 

“The status quo is not enough,” Ngozi Okonjo-Iweala told reporters in Geneva.

“One should never be afraid to engage on the issues of the day, including foundational principles, especially at a time when you’re trying to in a world of uncertainty and geopolitics, you should have a conversation,” she added in response to a question about MFN.

“I believe ministers should have a conversation that looks at these key issues… Maybe then ministers will have a chance to reaffirm or not reaffirm, as the case may be,” she said. 

WTO members are considering a programme of reforms ahead of a ministerial conference in Cameroon in March, amid concerns that future global trade could be decided outside the 30-year-old watchdog unless it reforms itself quickly.

Global commerce was rocked last year after U.S. President Donald Trump unleashed sweeping tariffs on global trade partners, and companies are having to struggle with a rapidly shifting landscape.   

The U.S. said in a position paper on WTO reforms in December that MFN – one of the organisation’s foundational principles -was no longer suitable in a modern trading system, and favours moving towards a system where members can apply differentiated, non-MFN, and reciprocal trade measures.

In an opinion piece in the Financial Times in January, the European Union’s trade commissioner, Maros Sefcovic, also said members should question whether MFN remains fit for purpose. 

The MFN principle requires WTO members to treat others equally. The share of global trade conducted under MFN terms declined from about 80% to 72% since Trump imposed higher import tariffs on most trading partners, according to WTO data.

Sefcovic said countries should be allowed to change their tariffs more easily when their economies are threatened, adding: “Access to lower tariffs cannot be unconditional: it must be earned through stronger, credible commitments to the core principles of free and fair trade.”

Reporting by Olivia Le Poidevin; editing by Matthias Williams

European countries have rushed to boost defence spending since Russia invaded Ukraine in 2022 and U.S. President Donald Trump made clear they should expect less U.S. support through the NATO military alliance

International News via Reuters:

European politicians need to provide more clarity on who should do what to boost the continent’s defences, or risk wasting money due to slow decision-making and overlapping projects, a leading figure representing Europe’s defence companies has said.

European countries have rushed to boost defence spending since Russia invaded Ukraine in 2022 and U.S. President Donald Trump made clear they should expect less U.S. support through the NATO military alliance.

Alongside national governments and NATO – the long-dominant players in European defence policymaking and funding – EU bodies such as the European Commission and the European Defence Agency have become increasingly involved in the sector in recent years.

Many of their initiatives seek to fill gaps in Europe’s defences such as counter-drone systems, reduce reliance on the United States and encourage joint procurement of weapons.

“It’s a bit of an alphabet soup of organisations that have a role,” Camille Grand, secretary-general of the Aerospace, Security and Defence Industries Association of Europe, told Reuters in an interview.

“We don’t have yet a clean governance for all of that, to define who does what and how decisions are taken,” said Grand, speaking at the Brussels office of his organisation, which represents more than 4,000 companies in 21 countries.

EU GETTING MORE INVOLVED IN DEFENCE SECTOR

Recent EU initiatives include Security Action for Europe, a 150 billion euro loan scheme for defence spending, the European Defence Industrial Programme to boost the sector and a Defence Readiness Roadmap to get the continent ready to defend itself by 2030.

“It all boils down to getting a little more clarity on: How do we govern this necessary collective effort to deliver capabilities faster?” Grand said.

He highlighted air and missile defence as an area that would benefit from more clarity, as projects and initiatives from different bodies have emerged to protect against missiles, drones and other threats.

Some European officials also see a need for greater coordination. European Defence Commissioner Andrius Kubilius has called for the establishment of European Security Council, which could include countries outside the EU such as Britain in some decisions.

But EU foreign policy chief Kaja Kallas has expressed scepticism about the idea. “I don’t think another institution will actually make it easier,” she told reporters in Brussels on Tuesday.

Reporting by Andrew Gray; Editing by Alex Richardson