Report by President Charles Michel to the European Parliament plenary session

For nearly one year, Russia has pursued a strategy of destruction, a strategy of terror, trying to bomb the people of Ukraine into submission. We have witnessed this strategy in Bakhmut, in Soledar, and more recently in Dnipro.

But Ukrainians are resisting and they will continue to resist. And we, the European Union, will continue to support them for as long as it takes. We will continue our military support, thanks to an increase of the European Peace Facility. The time is now; they urgently need more equipment and I’m personally in favour of supplying tanks to Ukraine. 

We have also adopted a macro-financial assistance programme of €18 billion and we are stepping up the pressure on the Kremlin with a ninth package of sanctions.

We have also increased our material aid, especially to help Ukrainians face winter as Russia continues to destroy their infrastructure. We have sent nearly 80 000 tonnes of material, such as generators, boilers and transformers.

The European Union and its Member States are massively supporting Ukraine – we have already committed nearly €50 billion – and European citizens are in favour of this support, according to the latest Eurobarometer. Our citizens know that supporting Ukraine means supporting peace, democracy and the international order.

The European Council had a debate on our transatlantic relationship, a debate closely linked to another key priority for the EU: our European competitiveness, especially of our industry and future technologies. This will feature at our next European Council meeting in February.

The European Union and the United States are close allies, yet even allies sometimes have differences. This is the case with the Inflation Reduction Act. This legislation creates a $370 billion package of subsidies and tax credits to develop an ecosystem of advanced technologies to foster the climate transition and to promote American leadership in these sectors. Let’s be clear, these goals are laudable and legitimate, but their translation into the IRA poses serious problems for international competition and trade rules.

We sincerely hope the dialogue with our American friends will lead to concrete positive results. In my opinion, European companies must be able to benefit from the same conditions as Canadian and Mexican companies. But dear colleagues, we must look reality squarely in the face. Our American ally is embracing a massive state aid policy and China continues to invest state money in its technology sector.

In Europe, we must also act to show our European industry and our citizens that we are up to the challenge. Our European model consists of a social market economy that implies – for very good reasons – higher labour and environmental costs, and the current energy crisis means that we will have to face higher energy costs for the foreseeable future.

The EU has helped to build a global system based on free trade, while striving to ensure a level playing field. But we cannot stand idly by as our main competitors embrace policies of massive economic support for their companies. We must therefore mobilise massive resources to drive forward an ambitious European industrial policy to boost competitiveness, to turbo-charge productivity, and to spur investment.

That’s why in December the European Council tasked the Commission with bringing forward proposals with a view to our next meeting.

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