The return of U.S. President Donald Trump to the White House is a wake-up call for European Union countries to fix their economies and become more competitive, the EU's senior financial officials said on Monday as Trump was sworn in for a second term.
The 27-nation EU became increasingly worried last year about losing to China and the United States in the race for new technologies, especially ones that would help the bloc of 450 million people move to an economy with lower greenhouse-gas emissions.
Many European innovators expand their businesses in the U.S., where access to capital is easier and companies are less burdened with red tape.
In China, some firms receive large subsidies from the government to gain global market share, and Chinese industry already has a dominant position in solar panels, electric cars, wind turbines and batteries.
"The new Trump administration should be a wake-up call for Europe," Belgian Finance Minister Vincent Van Peteghem told reporters. "Rather than focusing on retaliation (against U.S. tariffs), we should focus on the challenges of Europe - the decreasing competitiveness and the increasing productivity gap that we face."
Rather than starting a trade war, the EU should boost its competitiveness and develop capital markets, officials said.
"On the election of President Trump, the best response ... is to redouble our efforts to deliver what we've already committed to do," the chairman of euro zone finance ministers Paschal Donohoe told a press conference.
SPECIAL U.S. RELATIONSHIP
Former EU trade commissioner Valdis Dombrovskis, now in charge of the EU economy at the European Commission, said the European Union was keen to preserve its special trade relationship with the U.S., but not at all costs.
"We need to preserve these trade relationships and that's our starting approach, both bilaterally with the U.S. but also thinking about the multilateral, rules-based trading system globally," Dombrovskis said.
"At the same time, if there is a need to defend Europe's economic interests, we are ready to do so, as we were doing during the first Trump administration."
Polish Finance Minister Andrzej Domanski, who will set the agenda of meetings of EU finance ministers until the end of June, said key to success in dealing with the new U.S. administration was for EU governments to stick together and to strengthen Europe's economic power.
"It is very important that Europe must remain united," he said, adding the EU had to focus on lower energy prices for its industry and consumers, as well as cutting regulation.
"We must focus on building the strength of the European economy. We must focus on how to reduce energy prices. We must focus on how to remove such a regulatory burden from European companies," Domanski said.
French Finance Minister Eric Lombard said the change of U.S. administration meant the EU would have to double down on protecting its industry.
"That is absolutely critical through the Clean Industry Act and other tools that we have in Europe," Lombard said, adding trade would also be a priority, as would the development of new technologies, especially artificial intelligence.
