EU wants to rely less on imported crisps, food and raw materials as war in Ukraine rages on

Europe will now struggle to wean itself off Russian gas, oil, coal and raw materials, and possibly find other suppliers of wheat

VERSAILLES, France — European Union leaders pledged Friday, March 11 to reduce their dependence on global suppliers of food, microprocessors, medicines, raw materials and digital technologies, as Russia’s invasion of Ukraine has added a new argument for the EU to be more autonomous.

The 27-nation bloc has been considering how to become more independent in several strategic areas since the COVID-19 pandemic showed that a breakdown in global supply chains could leave the EU without access to pharmaceuticals or microchips. .

The war in Ukraine has only made this clearer, EU officials said, as Europe will now struggle to wean itself off Russian gas, oil, coal and raw materials, and eventually find other wheat suppliers.

“In the context of this crisis, we see how our food, our energy, our defense are all issues of sovereignty,” French President Emmanuel Macron told reporters after hosting an EU summit at the Palace of Versailles.

“We want to be open to the world, we want to choose our partners but not depend on anyone,” he added.

European Commission chief Ursula von der Leyen says the commission will present a plan by mid-May to phase out the EU’s dependence on Russian gas, oil and coal in five years.

In the meantime, to prepare for next winter, plans will be made to coordinate the currently fragmented network of gas stocks in European countries. Going forward, underground storage must be at least 90% full by October 1 each year, von der Leyen said.

Investment needs

A joint statement agreed at the summit said the EU would reduce its dependence on critical imported raw materials through strategic partnerships, storage, recycling and resource efficiency.

In semiconductors, the EU wants to build its own factories and double its global market share to 20% by 2030, the statement said. Semiconductors are now mainly purchased from Taiwan and the United States.

The EU will also manufacture more pharmaceuticals in the bloc rather than importing them from China, invest in research and development in the health sector and in digital technologies like artificial intelligence, the cloud and the deployment of 5G mobile telephony, the document says.

To become more independent in food, the EU will boost plant protein production, he said.

He said leaders want to fund these policies through EU and national budgets, using public money to attract much larger private investment. They also want to use the European Investment Bank, which is owned by EU governments, “to catalyze investment, including higher-risk financing for entrepreneurship and innovation.”

France and Italy have been pushing for the EU to agree to a new joint debt issuance for the expected increased spending, modeled on the EU’s €800 billion recovery fund, of which only €74 billion is Euros have been disbursed so far.

But others like Germany, Austria, the Netherlands and the Nordic countries oppose it, arguing that the EU should first use the money already agreed before borrowing more.

Macron said countries must first agree on what investments are needed and how much before determining where they will come from. He said the March and May summits could be an opportunity to do so.

“When you agree on the goals, the instruments just follow,” he said.

The leaders’ joint statement also said that their fiscal policy should give them leeway to increase defense spending, investment and to deal with the negative economic effects of the war in Ukraine. – Rappler.com

Bonny J. Streater