Mandelson to EU: It's time to get real

Friday 6th November 2009

Lord Mandelson has declared the European Union needs to "get real" and reorganise itself or face being left behind in the global economy.

The business secretary will say in a speech to a thinktank in Brussels later the EU needs to rebuild strong leadership and implement radical economic change to cement its standing on the international stage.

A total reordered global economy faces Europe, he will warn, and nothing should be left to chance.

"The idea that this doesn't require serious new thinking in Europe is just not credible - it must be based on new strengths and capabilities to enable us to compete in a much tougher global economy," the business secretary will say in his speech.

"We will either step into a meaningful role in a multipolar world, or make do with a walk-on role. Will we drive the agenda, or become a subsidiary of a process driven and shaped elsewhere, above all by the G2, meaning the US and China.

"We need policies and structures for this changed world. So it is time that Europe got real."

Lord Mandelson has called for the EU's structural and research funds to be refocused to support innovation as well as "driving forward the benefits of a single market".

The organisation of the European Commission should also be reconsidered to reflect the importance of innovation, the digital economy and climate change, he believes.

Lord Mandelson will claim the EU's current budget priorities are misaligned and in need of change.

"We need to start seeing that the EU budget of 'just one per cent' of EU GDP as a critical one per cent of added value for the EU - but that should be better used, notably at the cutting edge of our investment in European innovation, especially in the skills that help people get good jobs and in low carbon job creation," he will say.

"EU rules risk suppressing investment in innovation. Change is needed. EU rules need to encourage private capital to invest and innovate, and state aid rules need to provide the right kind of space for governments to encourage and facilitate such investment. That's a departure, but it is necessary."

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