Von der Leyen says EU not in trade war with China

Election debate on economic policy hears EU should fund common ‘air defence’ shield

Europe is not in a trade war with China but still needed to reduce the risks associated with being overly dependent on the global power, European Commission president Ursula von der Leyen has said.

Ms von der Leyen, who is campaigning for a second term as head of the commission, was critical of China “flooding” the European market with artificially cheap products. “I don’t think that we are in a trade war...We are de-risking from China, we have decoupled from Russia.”

Ms von der Leyen, the lead candidate of the centre right European People’s Party (EPP), was speaking in Brussels at a European election campaign debate on economic policy on Tuesday evening.

The EU needed to be “tough” when it came to China, she said. At present there were barriers on medical device exports from the EU getting into the Chinese market, which she said needed to be addressed. “We know the world is changing, we know that competition is getting tough. But the single market has been our safe harbour so let’s strengthen it.”

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Ms von der Leyen said stalled financial reforms to make money and private investment move easier within the bloc needed to be completed. The lack of progress of the capital market union reforms to date was one of the “main obstacles” facing the EU.

Sandro Gozi, an MEP from the centrist Renew group, said failure to push ahead with the market reforms was the fault of the EPP group. The debate, which took place in a Brussels events centre, was organised by economic think tank Bruegel and the Financial Times newspaper.

Nicolas Schmit, from the centre left Socialists and Democrats (S&D) group, rejected the idea the EU single market was broken, but added it was “unfinished”. He said some EU countries’ objections to the capital market union reforms were “not really reasonable”.

Mr Schmit, who is the current EU commissioner for jobs and social rights, said Europe could not be naive and “ignore” state aid supports the US and China were giving to certain key industries. The Luxembourg politician said the EU was in the “beginning” of a possible trade war with China.

People would be willing to pay more money to the EU if taxpayers could see the results from the benefits of pooling resources, he said. EU efforts to improve defence capabilities would not be “for free” and citizens needed to understand that. “If we want to have European defence it will not be possible without some European indebtedness.”

On the question of security Ms von der Leyen said she would support the establishment of an “air defence shield” that was a common European project funded by member states.

Anders Vistisen, a Danish MEP from the far right Identity and Democracy group, criticised what he called the European era of “mass regulation”. He said while the US rolled out the “red carpet” for businesses, the EU “rolled out the red tape”.

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