Italian Prime Minister Proposes New Pan-European Fund for Competitiveness Investments: Addressing Disparities in State Subsidies and Strengthening EU Integration
Italian Prime Minister Enrico Letta has proposed the creation of a new pan-European fund to finance competitiveness investments. The European Union member states are continuing their extraordinary summit in Brussels, with today’s agenda focused on improving competitiveness and strengthening the internal market.
Letta, who has been working on the EU internal market report since last fall, presented his findings to the heads of state at the summit. In his 147-page report, Letta emphasized the need for a comprehensive internal market strategy from the EU Commission. He highlighted the importance of dismantling trade barriers and increasing competitiveness within the Union.
The relaxation of EU state aid rules, according to Letta, has led to distortions in the competitive landscape among member states. To address this issue, Letta suggested implementing a state aid assistance mechanism that would require countries to allocate national funding to pan-European competitiveness investments. He argued that some countries have more fiscal leeway than others, leading to disparities in state subsidies.
Furthermore, Letta called for the development of political tools within the EU to strengthen industrial strategy, similar to the US IRA. Various organizations and experts, including the Confederation of Business and Industry in Finland, Bruegel think tank, and Suomen Yrittäje, have shown support for Letta’s report. They believe it presents sensible and necessary ideas for deeper integration and competitiveness within the EU. However, finding political consensus across member states remains a challenge in implementing these ideas fully.
