EU seeks to leverage might to confront China, US challenge

EU leaders gave fresh impetus on Thursday to a controversial project to integrate the bloc's financial markets in a bid to keep pace with China and the United States -- including in the global race to produce clean technology.

The single market has supported the rise of European giants in different industries, from aviation to chemicals to cars. But at more than 30 years old, the European Union agrees on the need for an update.

During a summit in Brussels, EU leaders were told that the time has come to scale up the single market to include the defence, energy, finance and telecoms sectors.

The argument goes that fragmentation in those sectors with divergent national rules hurts the EU's competitivity, at a time when global powers like China and the United States are pouring billions into state aid to prop up their key industries.

Although the EU has a single currency, the status quo means its start-ups cannot raise the jaw-dropping amounts their US rivals can, and Europeans currently find it more rewarding to send more than 300 billion euros of their savings out of the bloc, mainly into US markets, each year.

"That is money missing for the development of our companies and the European Union. And it is due to the fragmentation of our capital markets," European Commission chief Ursula von der Leyen told reporters after the end of the summit.

The idea of integrating the 27 EU member states' markets, however, divides the bloc, and led to several hours of intense discussions between the leaders.

"There was a very long debate because the starting positions are divergent," French President Emmanuel Macron told a press conference.

"The savings and investment union is the key to being able to mobilise private financing for our priorities. Today, we established a method, principles, a timetable. We will return to the subject from June," Macron added.