MEPs debate with the presidents of the European Council and Commission the conclusions of the Special European Council meeting of 9 February and preparation of the European Council meeting of 23-24 March 2023. EU's Heads of state or government focus on the latest developments in Russia’s war against Ukraine and the EU’s continued support for Ukraine, on competitiveness, the Single Market, how to boost the EU economy, and on energy related issues. Opening statements by Charles MICHEL, President of the European Council, and by Ursula von der LEYEN, President of the European Commission. This transcription is a result of an automatic process. Please check against delivery.

statement

Strasbourg

debate

plenary session

METSOLA, Roberta (EPP, MT, EP President)

MICHEL, Charles (BE)

VON DER LEYEN, Ursula (DE, EC)

European Council meeting 23-24 March 2023 (T)

Conclusions of the European Council of 9 February and preparation of the European Council of 23-24 March 2023: opening statements by Charles MICHEL, President of the European Council, and Ursula von der LEYEN, President of EU Commission

SOUNDBITE (English), Charles MICHEL, President of the European Council, Ladies and gentlemen, our last European Council was marked by the participation of President Vladimir Zelensky. He took part in a brief plenary session where we had the occasion to reaffirm our full support for Ukraine for as long as it takes. Because defeat for Ukraine is not an option. Vlodimir Zelensky then met in small formats with leaders of both intensifying their direct operational assistance, especially for more weapons to win the peace.

SOUNDBITE (English), Charles MICHEL, President of the European Council, We must strengthen our defence and our capabilities. And three days after the Russian attack. We took the decision to deliver arms and munitions to Ukraine and this marked a paradigm shift. I believe this was the birth of our European defence. Strengthening our European defence means developing our industrial capacities and this is urgently needed to support Ukraine.

SOUNDBITE (English), Charles MICHEL, President of the European Council, Russian forces have fired between 20 and 50 thousand artillery shells per day in recent months. Ukraine needs ammunition to defend itself and that's why we have worked on the proposal of Estonian Prime Minister Kaja Kallas to organise bulk orders to support the pace of our deliveries to our Ukrainian friends and High Representative Borrell has developed a concrete plan to implement this assistance to Ukraine.

SOUNDBITE (English), Charles MICHEL, President of the European Council, Listen, gentlemen, we would like to see an escalation. We would like to see an escalation towards peace. But Russia has not stopped austerity in the war. It would only take one decision, just one decision from the aggressor to engage in peace, to silence the weapons and to withdraw its troops behind the internationally recognised borders of Ukraine. Unfortunately, we do not see any signals from the Kremlin in this direction.

SOUNDBITE (English), Charles MICHEL, President of the European Council, And despite this, we continue to fight the battle for peace, the diplomatic battle. We support the just peace formula proposed by President Zelensky. It is based on the UN Charter. It is based on the respect for the international law. And we are working hard to rally the international community behind peace efforts like we did in the run up to the vote in the UN General Assembly, calling for the withdrawal of Russian forces from Ukraine territory.

SOUNDBITE (English), Charles MICHEL, President of the European Council, We also  discussed, for instance, this we many contacts at the recent African Union summit in Adis Abeba. And the High Representative went to the United Nations in New York for the vote. The resolution was supported by an overwhelming majority of 141 countries. This vote is encouraging, but the work of convincing others remains extremely challenging.

SOUNDBITE (English), Charles MICHEL, President of the European Council, Ladies and gentlemen, honourable members. The economic consequences of the war in Ukraine have forced us to ask ourselves the right questions about the competitiveness of our economy, both in the short and long term. Just one example to illustrate the challenge the EU's energy trade deficit in 2022 represented some 4% of our GDP, compared with 1.7% in 2021.

SOUNDBITE (English), Charles MICHEL, President of the European Council, While the United States has seen its surplus increase three fold during the same period and exports in the United States have increased by 60% in 2022. Last December, the European Council asked the Commission to present ways of helping our industry drive forward a green and digital transition, especially in the context of more targeted state interventions, including by the United States.

SOUNDBITE (English), Charles MICHEL, President of the European Council, And we have decided on those short term strands of action. First, we election to state aid resilience in a targeted and time limited way, coupled with greater flexibility in the use of all existing financial means. Certain point making life easier for businesses by streamlining procedures and authorisation. And third, stepping up training. And we trained to provide our future sectors with the professionals the desperately need.

SOUNDBITE (English), Charles MICHEL, President of the European Council, But ladies and gentlemen, we also must take action in the long term because we cannot allow the short term measures to undermine our long term strategy. And this is exactly, precisely the debate we will have next week at our next European Council on the competitiveness of the European economy. And we expect the proposals we received from the Commission tomorrow. In the long term, I think we need to work on three areas investment, innovation and trade.

SOUNDBITE (English), Charles MICHEL, President of the European Council, First, investment. European companies, particularly SME, are having difficulty finding the capital they need to invest in innovation. The gap between the EU and the United States in terms of productive investment represents 2% of GDP. Another example, the EU stock market capitalisation is less than half that of the US as a proportion of gross domestic product. And yet Europeans save far more than Americans.

SOUNDBITE (English), Charles MICHEL, President of the European Council, We must close this gap and we know the solution. There is a solution. This is called the Capital Markets Union, a project whose foundations were laid almost ten years ago and so crucial that we speed up legislative work to bring this essential project to fruition. To finance our economy, to create jobs, and to ensure the wellbeing of all Europeans for decades to come.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, President Metsola, Roberta. President Michel Charles. Honourable Members. Last Friday, I met with President Biden in Washington. We had a very good discussion on the Inflation Reduction Act. There is a striking symmetry between the Inflation Reduction Act and the European Green Deal. Both of them are simultaneously a climate strategy and a strategy for investment and growth.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, Both of them include funding for just transition. And both include regulatory standards. Only on carbon pricing. A very important instrument. The United States system is still much more limited than ours. In other words, the two biggest and most advanced economies in the world are now moving in the same direction. And therefore I welcome the Inflation Reduction Act for its massive investment in clean tech.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, But you might perhaps recall that we discussed it already in November. Some aspects of the Inflation Reduction Act were of concern to us and needed solutions. Now, I am happy to report that we have found solutions. On Friday, President Biden and I confirmed the understanding on electric vehicles. That allows European car makers to get access to the U.S. market and thus to U.S. tax breaks.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, Second, we launch discussions on the critical raw materials agreement. The aim is to ensure that critical raw materials for electric vehicle batteries, whether they are extracted or processed in the European Union. Are treated in the same way as if they came from the United States. And thus this will secure strong supply chains for batteries in Europe and ensure access to the U.S. market.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, And my third point, we started the transparency dialogue on incentives for the clean tech industry. That's good news overall. But let me be clear. Negotiations can only solve some of the most concerning issues. The big bulk of work still lives with us in Europe. We Europeans need to get better at nurturing our own clean tech industry. We need to speed up. We need to simplify procedures. We need to grant better access to public and private finances.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, And if there's any doubt, let me give you three figures that underscore why this is so important. The global investment in the clean transition topped $1 trillion last year, and that's 30% more than the year before. And if you look at the global market for net zero technologies, it is set to triple by 2030. So in other words, the race is on the race on who is going to be dominant in this market in the future.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, And we must get our act together. If we want to stay frontrunners, we must nurture our own clean tech industrial base, both to create good jobs, well-paying jobs here in Europe, and of course, to ensure access to the clean solutions we need so urgently. And that's what the European Green Deal Industrial Plan is all about. The centrepiece of the Green Deal industrial plan are two legal acts.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, The one is the Net-zero Industry Act. And the other one is the Critical Raw Materials Act. The commission is proposing those two legal acts this week, actually tomorrow. Let me reflect on both with the Net-zero Industry Act. We are setting the ambition. By 2030, we want to be able to produce at least 40% of the clean tech that we need here to fulfil our green transition. And therefore the Net-zero Industry Act is all about speed, speed and facilitation.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, We are facilitating permitting. We are working with regulatory sandboxes. We are creating simpler state aid schemes and we are following allowing for tax breaks and the flexible use of EU funds. So in short, the Net zero Industry Act provides speed simplification and it provides funding. The second centrepiece is the Critical Raw Materials Act, which the college will also adopt tomorrow.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, This is about securing the supply for critical materials which are badly needed for the digital and green transition. These minerals, as you know, power phones and electric vehicles, the batteries, the chips, the windmills, the solar panels, you just name it. In other words, we cannot function without them. The critical raw materials and the demand for critical raw materials will dramatically rise over the next several years and decades.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, But and we've discussed that here in the hemicycle before. As you all know today, the European Union depends heavily on a few third countries for these strategic raw materials. Just a few examples and you know, plenty of them. We get 98% of our rare earth supply from China. 93% of our magnesium from China. 97% of our lithium from China. And you can continue this list over and over again.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, And honourable members, we know that the pandemic and the war have taught us a bitter lesson about over dependencies. So if we want to be independent, we urgently need to strengthen our and diversify our supply chains with like minded partners. I was last week also in Canada. And this is a like minded partner. You can see exemplary there. European companies just doing just that. Diversifying and strengthening our supply chains.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, For instance, sourcing low carbon nickel to produce batteries here in the European Union. And Canada is not only a reliable partner. It also shares our values. It guarantees that raw materials are mined with the highest standards for the environment and for workers. So our critical Raw Materials Act will support these efforts by European companies. We want to extract more orders and minerals here in the European Union.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, We want to boost our processing capacity to at least 40% of annual consumption. And of course, we need to recycle more. Again, if I may jump back to Canada, I visited a company that is able to recycle from old batteries. 95% of the lithium, the cobalt and the nickel, 95%. It's amazing to see that old batteries. So that's the future. That's what we have to have in the European Union.

SOUNDBITE (English), Ursula von der LEYEN, President of the European Commission, Honourable members. With a war on our doorstep. With volatile energy prices. At massive clean tech investments worldwide. Europe has to up its game. I am looking forward to develop the proposals we have put on the table today. This is our answer. Long live Europe.