President focuses on Ukraine, energy and trade

Brussels, 15 December 2022

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Ukraine

Good evening everyone, glad to be with you again. Today’s European Council provided an opportunity, first of all, to take stock of the situation in Ukraine with President Zelenskyy and then all 27 [EU Member States], at a time when the Ukrainian people are facing major challenges in the very short term, with a Russian aggression whose intensity is not letting up, and increasingly low temperatures.

We’ve taken important decisions in the past few days and hours to try and bolster our support to Ukraine and the Ukrainian people. First of all, our military support has been further increased, with an additional €2 billion that we’re putting into our European Peace Facility. Secondly, we agreed on the additional €18 billion in budgetary assistance to Ukraine. As you know, there have been a few obstacles in recent days, which have been removed to enable it to cope financially over the coming year. And in the last few minutes we’ve also adopted a new package of sanctions, because Russia must pay the price for its unjustified aggression against Ukraine.

We also reviewed the conference that we organized in Paris on 13 December and co-chaired with President Zelenskyy. I think it enabled us to give a strong and lasting impetus to the Ukrainian people’s resilience and resistance for this winter, by mobilizing our businesses and deploying support in terms of generators, LEDs, food and sanitation, with just over €1 billion of commitments from the countries that gathered at the Paris conference. We’ll have to maintain this collective commitment and continue working both on immediate resilience and, as Europeans, on Ukraine’s reconstruction.

Energy

This European Council – this is the second main issue that was discussed – also provided an opportunity to take stock on energy. We’ve been talking about energy at the European Council for a few months – that won’t have escaped anyone in this room. Also because it’s been confirmed to us in recent months that President Putin hasn’t hesitated to pose risks to the regularity of our supplies and the volatility of prices, and basically to weaponize energy. In the face of this situation, our determination is to continue moving forward in unity and solidarity.

Well, things have been done in recent months, and they mustn’t be underestimated. Gas stocks have been restored, solidarity tools have been built, and where Europe was very dependent on Russian gas – it has to be said, this was one of those vulnerabilities – we’ve managed since the spring to very markedly reduce that dependence, and reduce it so as to be able to get through this winter. We’ve also adopted European measures to secure and redistribute the energy suppliers’ additional revenue derived from the increase in prices on the market – the second very concrete thing done in recent months – but we must go further.

There’s been genuine convergence in the past few days, at the latest meeting of our energy ministers, and I’d say 90% agreement. We laid down the political conditions for ensuring that on 19 December – i.e. the next Energy Council – we can finalize, as it were, the broad priorities of this energy policy. It’s absolutely essential to do so before the end of the year. And there are several components to this strategy. First of all, speeding up renewable energy projects, and so there is, I should say, a European package that our ministers are going to adopt, which incidentally reflects the type of effort we’re also making nationally, and there’s even a law going through the French Parliament right now, as you know. That’s additional.

We’re also taking advantage of this period to make rapid progress towards a more electric Europe and move forward on the use of low-carbon hydrogen for our industries. That, too, is the purpose of ad-hoc legislation. We’re having the technical discussions and we’ve defined the actual political framework that will enable our ministers to finalize the issue of a gas price cap. Outstanding work has been done, but they may finalize it on 19 December.

And we’ve also – can I say this is the most important and crucial thing for me – endorsed an acceleration of our joint purchases and, above all, medium- and long-term contracts, because if we want to lower gas prices for our households, compatriots and businesses we must be able to purchase jointly, and we’ve been pushing this since the summer, as you know. We had endorsed the principle but it was voluntary, it hadn’t really been implemented. Now the platform is starting to be set in motion. It’s being managed by the Commission President. She’s entrusted it to a European commissioner. Next week the first meeting will be held with all the companies concerned and all the main sellers. That, incidentally, is the very purpose of the discussion we had in Paris at the beginning of the week between the Norwegian Prime Minister, the Commission President and myself. And so our aim is now to organize this platform as quickly as possible, make it operational and sign medium- and long-term contracts for Europe, because that’s what will give us a clear idea of the way ahead on prices, enable us to lower them and above all prevent the volatility we saw at the end of the summer.

So those are all the mechanisms whose political principles have been endorsed, and we’ve finalized the last discussions, so to speak, to ensure our ministers can adopt the legislation on 19 December.

Trade

The third main issue tackled at the Council was our continent’s economic situation in the context of growing competition, in particular following the change in energy prices and the legislation adopted by the United States of America: both the so-called Chips Act and the Inflation Reduction Act [IRA]. During the State visit paid to the United States a few weeks ago, I had the opportunity to say things very clearly in public and have an intense discussion not only with President Biden, his teams and his administration but also with members of Congress, from whatever party. It’s clear that this legislation, which is good for the USA, which reflects the goals we’re pursuing – in other words, to speed up the renewable-energy and technology production that is good for the climate – and so this legislation, which goes in the right direction and is also aimed at reducing the USA’s dependence on China, is having a real and significant impact on our competitiveness. It’s leading to certain types of energy, and above all some industrial projects, being massively subsidized, which, because of those subsidies and this aid, is hampering our competitiveness.

On this issue, the strategy we’re going to pursue – and I welcome this because we must speed up, as I called for in Washington a few weeks ago – is first of all to speed up talks with the United States to secure, on the one hand, exemptions comparable to what the Canadians and Mexicans have managed to secure, i.e. get away from the 100% American [principle] imposed on us, with the exception of commercial vehicles. That’s fundamental if we don’t want to fragment chains of production between Europe and the United States. But above all it’s fundamental in order for us to protect whole swaths of our industry. Secondly, we want to secure clauses enabling us to look at each project individually, and, when a level and type of aid is established for a company, for us Europeans to be able in a way to bring together the same conditions to keep the project when it was planned on our soil.

Also, as I wanted to see, we’ve given the Commission a mandate to finalize, at the very beginning of next year, basically a European equivalent of the IRA, in other words simplify the State aid system and find much quicker and clearer instruments for our businesses, because on the American side there are immediate, clear, secure tax credits, whereas we help in many areas but through Projects of [Common] European Interest, which are sometimes very lengthy and whose assessment entails uncertainties and above all, in some cases, lasts two years. So we must have much more tailored and speedier tools, and increased national and European budgetary investment, using not only what isn’t currently mobilized in RePowerEU but also new national and European tools that we’ve asked the Commission to find.

And so in this case, what the Commission has been asked is to do more, very quickly, and also have a raft of legislation to speed up this clean energy, ranging from the production of low-carbon hydrogen for our industry to electric batteries and renewable or nuclear technology, and we must be able to invest faster in this and attract the best projects in the world. I had the opportunity to stress the urgency of this climate and technological ambition, and the mandate we’ve given the Commission seems to me to go in this direction. And alongside this, it’s also about our ability to develop a “made in Europe” strategy to make our EU a more competitive continent of innovation and production.

As you can see, this is fully in keeping with the spirit and the letter, the framework and the continuity of the Versailles agenda, and in my view this is an absolutely essential point. And the US decisions make the policy we endorsed together even more essential. In this regard, the creation of the sovereignty fund which the Commission President proposed is part of this approach. (…) The aim is for it to come about next spring or summer at best; we need some very swift decisions in the first quarter that move in the direction I’ve just mentioned. On these issues, the decision has also been taken to convene a Council on 9 and 10 February to return to this priority issue, i.e. our response to the US Inflation Reduction Act and European competitiveness, and also to discuss the migration issues raised by several Member States.

Southern Neighbourhood

Several other issues were then discussed. I’ll go into them much more quickly. The relations between our Europe and its southern neighbourhood were a focus of our discussions at this Council. This cooperation is already strong and substantive, and in this regard I’m pleased that, during the Spanish presidency of the Council of the European Union, we planned a summit to go further on this and above all roll out the plan decided on in 2021.

European defence

We had a useful discussion about European defence, and there again, in line with the objectives we set in Versailles in March, we approved a strengthening of Europe’s defence industrial and technological base, to guarantee more European production capacity.

Taxation

And I’m also pleased that on several projects, today and this week, we saw tangible progress, because they’re projects the French presidency was committed to. Indeed, today we’ve secured – there again in the past few minutes, as part of the agreement we’ve delivered in the last few hours – a 15% minimum tax rate for [multinational] companies, and Pillar 2 of this package, on which there was deadlock, has now been approved. And so on this minimum tax – which France has been committed to for more than four years now, which gave rise to work in the framework of the OECD and the enlarged group, which has now been transcribed across Europe and faced successive obstacles from several countries – well, at the COREPER, held in parallel with our Council this evening, those obstacles were removed. It really is a major step forward for all those who, like us, care about fair taxation and our ability to tax all economic actors at a rate of at least 15% when, as you know, many groups were not taxed on our soil. This agreement which the OECD has enabled with all the States – even those who don’t belong to the OECD endorsed it – was necessary, and now the Europeans have translated it into deeds and, I should say, into law.

Carbon border tax

And also adopted this week was the carbon border tax, which, as you know, is a mechanism we’ve been very broadly committed to. It was another significant step forward this week. Those were the main issues discussed.

I wanted to take the opportunity this evening to thank the Irish Taoiseach and the Cypriot President – who were experiencing their last Council alongside us this evening – for their action and companionship, and express to them my friendship but also how pleased we’ve been to cooperate with them and their teams. I’d also like to thank Petr Fiala and all the teams from the Czech presidency and the Council of the European Union, who have done outstanding work in the past six months, and wish every success to the Swedish presidency, which is going to take over in a few days’ time. In the first days of January I’ll have the opportunity to host the Swedish Prime Minister in Paris to carry out a full review of all these projects. (…)./.