In a bid to boost competitiveness and strengthen the European Union’s internal market, former Italian Prime Minister Enrico Letta has proposed the creation of a new pan-European fund. The European Union member states are currently holding an extraordinary summit in Brussels, with the agenda focusing on these issues.

Letta, who has been working on the EU internal market report since last fall, presented his findings to the heads of state at the summit. His 147-page report highlights the need for a comprehensive internal market strategy from the EU Commission. He emphasizes the importance of dismantling trade barriers and increasing competitiveness within the Union.

According to Letta, the relaxation of EU state aid rules has led to distortions in the competitive landscape among member states. To address this issue, he suggests implementing a state aid assistance mechanism that would require countries to allocate national funding to pan-European competitiveness investments. Letta argues that some countries have more fiscal leeway than others, leading to disparities in state subsidies.

The report also calls for the development of political tools within the EU to strengthen industrial strategy, similar to the US IRA. Various organizations and experts, including the Confederation of Business and Industry in Finland, Bruegel think tank, and Suomen Yrittäje, have shown support for Letta’s report. They believe it presents sensible and necessary ideas for deeper integration and competitiveness within the EU. However, finding political consensus across member states remains a challenge in implementing these ideas.