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EU wants less dependence on imported chips, food, raw materials, as Ukraine war rages -Breaking

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© Reuters. FILEPHOTO: Flags from the European Union are seen outside of Brussels headquarters for European Commission, Belgium. April 10, 2019, REUTERS/Yves Herman

By Jan Strupczewski

VERSAILLES (France) – European Union leaders are expected to say Friday that they intend to reduce their dependency on international suppliers of food and microprocessors as well as drugs, raw materials, digital technologies, following the Russian invasion of Ukraine. This is a strong argument to make the EU more self-reliant.

Since the COVID-19 pandemic, the 27-nation bloc was faced with the challenge of becoming more self-reliant in many strategic areas.

Officials from the EU stated that Ukraine’s war has made this even clearer. Europe is now struggling to get off Russian oil, gas and coal, and may need alternative sources of wheat.

“Confronted to growing instability and threats from strategic competition and security, we decided to…take further decisive steps toward building our European sovereignty, reducing dependenceencies,” read the joint draft declaration by leaders who met in Versailles.

In the Declaration, it was stated that the EU would decrease its dependency on imports by creating strategic partnerships, stockpiling and recycling, as well as improving resource efficiency.

According to the draft, in semi-conductors, the EU would like to create its own factories and increase its global share from 20% to 20% by 2030. Semiconductors come mainly from Taiwan and the United States.

It was also stated that the EU would make more EU-produced pharmaceuticals than China imports, as well as invest in research, development, and deployment of digital technologies such artificial intelligence, 5G mobile telephone telephony, and Cloud.

The EU plans to increase plant-based proteins production in order to make food more affordable.

According to the report, the leaders are keen to use public money to encourage more private investment and finance these policies via the national and European budgets. The leaders also plan to make use of the European Investment Bank owned by EU countries, “to stimulate investments and provide higher risk financing for innovation and entrepreneurship.”

France and Italy are pushing the EU to issue new debt for increased outlays. This is based on the EU’s recovery fund of 800 billion euro, which has only been used to disburse 74 billion Euro so far.

Others, such as Germany, Austria and the Netherlands, oppose this argument, saying that the EU should use cash previously agreed to before borrowing further.

According to the draft, leaders will declare that they will allow more money for defense, investment, and dealing with negative economic consequences of war in Ukraine.

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