The European Union faces a key challenge: How to become a political and economic power that will deal with China and the USA on an equal footing.

Author - Natko Plevink, Digital Consultant

We must refrain and believe that an event in which a global economic and monetary power such as the European Union is conducting difficult negotiations with a company over non-compliance with the vaccine delivery contract is not another sign of Brussels' impotence. What will the future of the Union be and does it have the strength for the changes that the future requires despite the daily struggle of European institutions with the challenges of the COVID-19 disease?

New policies that the EU should simultaneously recover from the pandemic crisis, build the European Health Union, improve the European social model, strengthen the role of the Parliament, and maintain, but also improve its position as a global leader not only in the fight against climate change, have already been formulated. So what the Union needs is a long-term economic and political strategy to make it an economic power that can compete with China and the United States. At the end of 2020, the presidents of the Parliament, the European Council, and the Commission, under the long-term budget agreement, committed to implementing policies that will shape the European Union as a greener, fairer, and more digital Europe by 2024.

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In the areas of shaping policies to control climate change, global health, and non-proliferation of weapons, the EU can count on cooperation with the US and China. Still, when it comes to plans to build digital sovereignty and civil cyber security in Europe, the Union will have to rely on how ready are EU politicians to build a new form of European Union sovereignty and a single digital market. People should not see the Biden administration as the end to all of the EU-US problems. Of course, it is not in Washington's economic interest to reduce the European Union's dependence on American Internet companies using new laws, antitrust rules, and higher taxes. Everyone knew that the day would come when the EU would no longer be able to accept that traditional European companies have to pay taxes while international digital companies do not.

The EU regulations governing the internet have mostly been unchanged for several decades, which is why Brussels is now working on a draft of the Digital Services Act. The digital sovereignty of the EU is essentially a political project, as was the euro, which embodies the EU's goals towards an "increasingly modern Union", deeper integration, and stronger security. Behind the idea of ​​the necessity of building a digital Union, we have been seeing French President Macron in the front row for several years, who sees the digital independence of Europe as one of the keys to sovereignty that is crucial for success. France supports taking tangible actions to create a single digital market that will be based on European regulations, protect privacy, promote technological innovation offer European solutions, and support European talent.

These words are attractive and Europeans would love to see a digital Union in the coming years, but there is a suspicion that things could move more slowly than is appropriate for the spirit of the digital age. We can regret it, but in addition to this future work of building digital sovereignty, the EU is also dealing with policies and plans that should one day become capable of leading a strategic policy in Brussels and protecting its territory with joint forces. For this, it needs a rapid integration of the armed forces, a common defense budget, and a common doctrine of military action. The construction of the EU's strategic sovereignty could take longer than the digital one, because major changes are needed here, not only within the Union but also within NATO and the transatlantic partnership.

Another event from the end of last year also has the potential to place the EU in a new place in global economic relations and affirm the principle of reciprocity in bilateral relations with China. After several years of negotiations, the investment agreement between the two main economies, the EU and China, could have a profound impact on the prosperity and development of the entire Eurasian continent in the third decade of the 21st century. With the conclusion of these negotiations, EU diplomatic forces can now focus more forcefully on the negotiations on the EU-China Strategic Cooperation Agenda 2025, which is to replace Agenda 2020. The comprehensive investment agreement should provide European companies with "greater chances to enter the Chinese market" and increase competition between Chinese and European investors.

Among other things, China has committed to an unprecedented level of opening its market to EU investors, as well as to ratify key international standards, for example, ILO (International Labor Organization) conventions, and cooperating with the EU, to, together with other countries ensures the eradication of practices such as forced labor. This agreement also shows that the EU does not want a world where processes of separation from China will prevail. The Union is not interested in a cold war with its most important economic partner. If the investment agreement between these two global economic powers is implemented as agreed, it is possible to expect a better balance in the trade relations between the EU and China, and considering the size of their trade, this means at the world level as well.

Not everyone agrees with the EU leaders' claims that the investment agreement is balanced and equally beneficial for Europe. This agreement is certainly more important for the strong economies of the European Union (Germany, for example, has more than five thousand companies in China) than for members from the south and southeast of Europe whose investments in the Chinese economy are negligible, if any. This is the right place to open the question of how and in what direction the EU enlargement will take place in the coming years, which has not been a successful foreign policy of Brussels for a long time.