Executive Summary
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German Chancellor Friedrich Merz warned on Thursday that Europe risks losing its independence to global economic powers if leaders do not swiftly address the bloc’s declining competitiveness. Speaking in the German parliament ahead of an upcoming summit of European leaders in Brussels, Merz urged comprehensive economic reforms to prevent the continent from becoming a “pawn” of major economic centers in Asia or America.
Europe’s Economic Urgency
Merz emphasized the critical nature of the situation, stating that the next few years would determine whether Europe remains an independent economic force globally. His remarks come amidst increasing pressure at home to tackle Germany’s economic challenges, which have seen two consecutive years of contraction and minimal growth expected this year.
The German economy, heavily reliant on exports, has been particularly affected by factors including President Donald Trump’s tariff policies. German business leaders are now advocating for bolder reforms to stimulate growth across the nation.
Calls for EU Reform
While Merz’s centrist coalition has pledged domestic labor market and welfare reforms, the Chancellor has increasingly called on Brussels to take action. He urged the EU to reduce bureaucratic hurdles for businesses, strengthen the internal market, and pursue more global trade agreements.
“We do not have a problem with awareness in Europe; we have a problem with implementation,” Merz stated, underscoring his intent to press this issue with European partners. He specifically highlighted two studies by former Italian prime ministers Mario Draghi and Enrico Letta, which propose deepening the EU’s internal market and enhancing competitiveness, insisting they must be acted upon rather than shelved.
Global Trade Ambitions
Further to internal reforms, Merz called on the European Commission to actively negotiate more EU-specific trade agreements with nations and trading blocs worldwide. He specifically urged the swift conclusion of a trade agreement with the South American Mercosur bloc before the end of the year.
Merz’s strong message underscores a growing concern within European leadership regarding the continent’s economic trajectory and its ability to maintain a significant global standing amidst shifting geopolitical and economic landscapes.
