The President of the European Commission outlined a new strategy in the State of the Union Report
The Russian economy is currently breathing heavily, European Commission President Ursula von der Leyen told the European Parliament in Strasbourg today in her annual State of the Union report. According to her, the main question at the moment is who will win in the struggle between autocracy and democracy. “We firmly believe that Putin will fail and our values will prevail,” she said.
“European solidarity will remain steadfast. Russian industry is destroyed. The Kremlin is to blame for this. This is the price for Putin’s idea of ruin. Sanctions will continue,” Von der Leyen continued. “The Russian financial sector is dying. We have cut off 3/4 of the Russian banking sector from international markets. Almost 1,000 international companies have left Russia and car production is down 75 percent compared to last year. Aeroflot is grounding planes because there are no more spare parts. The Russian military industry is taking chips from dishwashers and refrigerators to repair their military hardware because there are no more semiconductors there. The Russian industry is shattered.”
The President of the EC also pointed to the difficulties in Europe caused by Russia’s war in Ukraine. As a result of Russia’s manipulation of the gas market, it is no longer functioning, and energy prices in the EU have risen 10 times compared to the pre-pandemic period, Von der Leyen said. As one of the main measures to deal with the problem, she pointed to the redirection of the huge profits of the companies producing electricity with inflated prices:
“These companies have revenues they never dreamed of. Don’t get me wrong – in our market social economy, profits are a good thing. But in these times, it is wrong to make record profits by war profiteering and on the backs of our consumers . In these times, profits should go to those who need them most.” The EU could collect over €140 billion from the excess profits of companies producing cheap electricity from renewable sources and fossil fuels.
In the presence of Olena Zelenska as the guest of honor, von der Leyen said that Ukraine and the EU can win the war against Russia. She was categorical that the support for Ukraine will continue, and the sanctions against Russia will remain, and she defined their effect as follows: “The EU sanctions against Russia will be permanent. It is time to be decisive and not relax.” According to her, Europe has so far provided 19 billion euros, not including military support for the Ukrainian side.
“One of the lessons of the war in Ukraine is that we should have listened to those who know Putin – the Russian journalists who spoke about the crimes and paid the price for it. We should have listened to the opposition in Belarus, the voices in Poland and the Baltic states, the countries from Central and Eastern Europe – we have been told for years that Putin will not stop,” she pointed out.
Von der Leyen proposed that the EU provide 100 million euros for the reconstruction of Ukrainian schools destroyed by Russian shelling, to stop roaming with Ukraine and for the country to get unimpeded access to the European single market. Most EU commissioners, as well as von der Leyen herself, arrived in the plenary hall dressed in the colors of the Ukrainian flag or with two-color yellow-blue ribbons on their lapels as a sign of solidarity with Ukraine.
The European Union’s economy will be supported by reforms and new coping measures. The fight against autocracy, corruption, climate change and aid for business of the European community is to be strengthened. These were the main highlights of Ursula von der Leyen’s speech. The transition has already begun, she said. Green energy is already coming from the countries bordering the Baltic and North Seas. 10 million tons of hydrogen have been pledged as utilization capacity. A new European hydrogen bank is being created. 3 billion euros from this bank will be set aside for the purpose of building the new hydrogen market.
New economic recovery measures will be proposed in October. Stricter accountability will be at their core. Access to raw materials from which microchips are made is crucial for Europe’s digital society, she believes. According to her, access to lithium will soon be more important than access to oil and gas. According to her, China controls the global manufacturing industry. 90% of rare earth elements, 60% of lithium (necessary for the green transition – b.r.) are processed in China, therefore strategic reserves are needed. Dependence on Russian fossil fuels should not be replaced in the green transition by dependence on China.
“I announce a European Act on critical raw materials. We are increasing financial participation in important projects of common European interest. In the future, I will insist that there be a single sovereign fund, so that the future economy is created precisely in Europe,” Von der Leyen informed.
The main emphasis in the speech was placed on the defense of democracy. “I am initiating a Pact for Values and Democracies – with the ultimate goal of shining a light on any undemocratic practices and the influence of autocracies in our EU.” Defending the rule of law and the independence of justice systems is a path to this,” said Ursula von der Leyen. Regarding the fight against corruption, the Commission will propose a new regime of European penalties.
“Europe is inspired by a very simple principle – to make it a much better place for the next generation. Therefore, a European convention should be organized. Europe is strong when it is united around a common cause. This is the future of the European Union – a union that is strong, a union that will win to survive Europe,” Ursula von der Leyen concluded her speech.