The Budapest Declaration: A Roadmap to Strengthened European Competitiveness
Photo: Reuters/PM Viktor Orban
In a significant step toward revitalizing Europe’s economic and geopolitical position, the European Union leaders have adopted the Budapest Declaration on the New European Competitiveness Deal on 8 November 2024. This declaration outlines an ambitious vision to address the EU’s pressing challenges, including geopolitical shifts, climate neutrality, technological advancement, and industrial renewal. Building on earlier discussions in Versailles, Granada, and Brussels, the declaration aims to unify member states under a common strategy to bolster Europe’s sovereignty, resilience, and global influence.The declaration recognizes the widening gap in innovation and productivity between the EU and global competitors like the United States and China.
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As the bloc grapples with slow economic growth, rising energy costs, and uneven regulatory frameworks, the Budapest Declaration serves as both a wake-up call and a strategic response. Reports from notable figures such as Mario Draghi and Enrico Letta have shaped the declaration, identifying the need for urgent reforms. Draghi, in particular, warned of Europe’s “slow agony” if decisive action is not taken to modernize its industrial base, while Letta emphasized the importance of research, innovation, and education as a “fifth freedom” within the Single Market.
The declaration identifies several strategic areas to drive European competitiveness:
By mid-2025, the EU aims to deepen the Single Market with a clear roadmap, fostering connectivity, growth, and economic resilience. A simplified regulatory environment will be introduced to reduce administrative burdens, particularly for SMEs.
The EU will prioritize the development of key technologies while transitioning traditional industries toward sustainability. This includes advancing a comprehensive industrial strategy to maintain the bloc’s position as a global industrial powerhouse.
The declaration reaffirms the EU’s commitment to climate neutrality by 2050 through an integrated Energy Union. Leaders emphasized the urgent need to address volatile electricity prices and ensure affordable, clean energy access.
Plans to establish a Capital Markets Union by 2026 aim to integrate financial markets, providing equitable access to capital for start-ups and SMEs. The EU also commits to allocating 3% of GDP to R&D by 2030.
Accelerating digital transformation and data economy opportunities are key focuses. The declaration calls for robust proposals to strengthen the EU’s technological capabilities by 2025.
