by Xinhua writers Ding Yinghua, Chen Hao and Zhang Zhaoqing
BUDAPEST, Nov. 11 (Xinhua) -- Two European meetings have been convened in Budapest with one on a new European competitiveness deal and the other to address pressing European security issues.
Analysts point out that these events provided a platform for European leaders to align on critical challenges amid the uncertain economic outlook. But deep-rooted divisions on issues like aid to Ukraine and political struggles in major EU nations such as France and Germany limited the meetings' potential outcomes.
ROADBLOCKS TO COMPETITIVENESS DEAL
A new European competitiveness deal was a focal point at the informal meeting of heads of state or government. According to the European Council, leaders endorsed the "Budapest Declaration," emphasizing the urgency of bolstering Europe's competitiveness through a new deal.
The EU's share of global GDP has halved over the past two decades, a concerning trend that leaders aimed to address by discussing competitive drivers introduced at an EU summit in April, said European Council President Charles Michel ahead of the meeting.
Media reports suggest the competitiveness deal discussions drew on a strategic report by Mario Draghi, former Italian Prime Minister and former European Central Bank president, which advocates for an additional annual investment of 750 billion euros (804 billion U.S. dollars) to 800 billion euros (857 billion dollars) to counteract Europe's competitive decline.
Draghi proposes issuing new fresh joint debt to bridge this substantial financial gap.
Ludovic Subran, chief economist at Allianz, commented that while the Budapest Declaration was endorsed, "Europe is not ready for this."
Analysts note that with Europe's uncertain economic outlook and continued internal disagreements, reaching a consensus on joint debt remains elusive.
France backed Draghi's proposal, yet Germany and the Netherlands rejected it almost immediately after the report's release. Although EU officials believed that Draghi's report will provide a strong basis for further EU initiatives, the Budapest Declaration remains vague on how to address the funding shortfall.
"That consensus did not come, and as a result we have suffered lower economic growth, and now stagnation," Draghi told reporters at the meeting.
SPLITS OVER UKRAINE AID
The issue of support for Ukraine remains a central concern for European leaders. European Commission President Ursula von der Leyen took to social media X on Thursday, urging Europe to take on greater responsibility in security, defense and aid to Ukraine.
Since the escalation of the Ukraine crisis in Feburary 2022, the EU and its member states have provided Ukraine with 118 billion euros (126 billion dollars) in aid, according to European Commission Executive Vice President Valdis Dombrovskis.
However, EU countries remain deeply divided over future aid. Hungary opposes further assistance, with Prime Minister Viktor Orban asserting that Europe cannot shoulder the financial burden of aiding Ukraine alone.
Slovak Prime Minister Robert Fico also questioned financial support for Ukraine, highlighting the need to prioritize resources for Europe's pressing issues like illegal immigration.
Matthew Burrows, director of the Strategic Foresight Hub at the Stimson Center, noted that European nations are increasingly divided politically and economically. The looming uncertainty over U.S. policy on Ukraine under a future administration has added to Europe's fatigue.
"FRANCO-GERMAN ENGINE" PREOCCUPIED
France and Germany, often regarded as the EU's "twin engines," have both encountered significant political troubles this year, with declining influence due to waning support for their ruling parties.
Analysts suggest this has weakened EU cohesion, with disagreements increasingly difficult to bridge and collective actions diminishing.
In France's legislative elections in June and July, President Emmanuel Macron's centrist coalition lost its majority. The new parliament was divided among the left-wing, centrist alliances and the far-right parties.
It created a rare period of over 50 days without a functioning government in France. Not until Sept. 5 did Macron appoint veteran conservative Michel Barnier as the new prime minister, restoring government functionality.
Meanwhile, Germany's coalition government encountered a political crisis following German Chancellor Olaf Scholz's announcement of the dismissal of Finance Minister Christian Lindner. It led the Free Democratic Party (FDP) to exit the administration coalition, leaving Scholz's Social Democrats, Greens and FDP in disarray.
The Carnegie Endowment for International Peace, a Washington think tank, noted that the coalition breakdown in Germany and persistent challenges for the French government have hampered EU efforts to consolidate its stance on key issues.
Germany, often regarded as Europe's leading economic engine, has faced an economic downturn in recent years, with declining manufacturing output affecting the EU's economic landscape. ■