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Facing backlash to green agenda, EU president goes pro-business, gets tough with China

As economic headwinds threaten the European Union with a new crisis, European Commission President Ursula von der Leyen focused on pro-business policies in her final State of the Union speech before European elections next June.

(CN) — In the last State of the Union speech of her mandate, European Commission President Ursula von der Leyen on Wednesday laid out a pro-business agenda, tapped the brakes on her flagship Green Deal and threatened to impose tariffs on Chinese electric vehicles.

In other key moments, von der Leyen, the EU's chief executive, renewed vows to support Kyiv in its war against Russia “for as long it takes” and said the EU must work to incorporate Ukraine, Moldova and several Western Balkan nations into the bloc.

“We need to set out a vision for a successful enlargement,” she said, speaking grandly about Europe “answering the call of history,” as her speech was titled.

She said bringing Ukraine and other aspiring members into the Brussels club would amount to completing the EU project “with over 500 million people living in a free, democratic and prosperous union.”

Modeled on State of the Union addresses by American presidents, the annual speech gives heads of the commission a platform to lay out priorities for the coming year. Unlike American presidents, commission presidents are not elected but chosen by EU leaders in an opaque process.

EU leaders will pick a new president following European Parliament elections next June. The elections may see a wave of support for far-right parties and a further shift to the right in Brussels. Still, pundits expect centrist parties, including von der Leyen's center-right European People's Party, the largest group in the European Parliament, to retain a majority.

Von der Leyen has not said whether she plans to seek a second term, but her pro-business speech on Wednesday was seen by many as an effort to shore up support among her conservative base for a rerun.

Fearing the loss of rural voters in the June elections, von der Leyen's party has rejected some of her commission's newest Green Deal initiatives, including proposals to turn farmland into nature preserves and outlawing some pesticides. Her commission also recently began considering taking wolves off the endangered list, a move favored by farmers and another sign of the growing backlash to her pro-environmental policies.

In her speech, von der Leyen did not push for new Green Deal measures. Critics say her green agenda may be fueling the rise of far-right and anti-EU parties.

“It is time to make business easier in Europe,” von der Leyen said, speaking to the European Parliament meeting in Strasbourg, France.

“After a few seconds into her State of the Union speech, you get a sense that corporate lobbyists did their homework,” commented Alberto Alemanno, a professor of EU law at HEC Paris Business School, on social media.

Still, von der Leyen's speech was a response to growing alarm in Europe over the bloc's economic slowdown, the newest crisis to hit the crisis-battered EU.

In the past year, Germany, the EU's economic locomotive, has lumbered toward the brink of a major recession while inflation has ravaged the 27-nation bloc. Now, with winter approaching, there is the risk of more energy price shocks.

Shoring up the economy, then, is quickly becoming more of a priority for many Europeans than following through on promises to drastically reduce carbon emissions, as mandated by the Green Deal package pushed into law by von der Leyen's administration.

To boost business, von der Leyen announced plans to cut by a quarter the bureaucratic reporting requirements faced by European companies.

In another boon to business, she said Mario Draghi, the former European Central Bank head and former Italian prime minister dubbed “Super Mario” for his ability at handling a crisis, would lead an effort to ensure businesses remain competitive even as Europe carries out its “clean transition” under the Green Deal.

“So we need to look further ahead and set out how we remain competitive as we do that,” she said.

“Europe will do 'whatever it takes' to keep its competitive edge,” she added, referring to a statement Draghi made during the EU's financial crisis to do “whatever it takes” to save the euro currency from collapse.

In another bid to shield its businesses from fierce global competition, von der Leyen announced the EU will open an anti-dumping probe against China over unfairly helping its electric vehicle makers. Sales of Chinese electric cars are outpacing those of European rivals.

“Global markets are now flooded with cheaper Chinese electric cars and their price is kept artificially low by huge state subsidies,” von der Leyen said. “This is distorting our market.”

She said Europe could not afford repeating the mistake of not challenging China as happened when the Asian giant took the lead in the solar panel market thanks to state subsidies.

“Many young businesses were pushed out by heavily subsidized Chinese competitors,” she said. “Pioneering companies had to file for bankruptcy. Promising talents went searching for fortune abroad.

“So, we have be to be clear-eyed about the risks we face,” she stated.

But the move risks angering China and opening a major trade dispute with Beijing. China is the main export market for German automobiles and German automakers expressed fears about Beijing retaliating with its own tariffs. France, meanwhile, has been pushing for an anti-dumping case against Chinese electric vehicles.

Von der Leyen said the EU cannot stand by and allow China to flood Europe with electric cars.

“It is a crucial industry for the clean economy, with a huge potential for Europe,” she said.

Relations between China and the EU have worsened considerably in recent years, with von der Leyen following Washington's calls to become less dependent on China.

On Wednesday, von der Leyen also said the EU must become less reliant on China for raw materials that go into making digital technologies. She accused China of hurting European companies by putting export restrictions on gallium and germanium, goods that are essential for making semiconductors and solar panels.

Courthouse News reporter Cain Burdeau is based in the European Union.

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