Europe’s competitiveness challenge is no longer cyclical but structural. With innovation, security and the clean transition all demanding capital at once, how can Europe reform its markets and institutions to unlock sustained productivity growth?
Europe’s competitiveness challenge is structural, not cyclical, and the panel converged on a clear diagnosis: fragmented markets, slow decision-making, and insufficient scale capital are holding back productivity. Ireland’s Taoiseach Micheál Martin argued that Europe must “become more self-reliant” while safeguarding the indispensable transatlantic relationship, noting that internal EU barriers can exceed the impact of external tariffs. EIB President Nadia Calviño emphasized Europe’s underappreciated strengths—world-class universities, leading firms, and democratic stability—calling for focus, “a clear compass,” and faster implementation of known reforms.
Business leaders pressed for speed and simplification. L’Oréal CEO Nicolas Hieronimus warned that in strong geopolitical and technological “currents,” Europe must “swim fast” or risk being “carried away,” citing regulatory inertia and the lack of support for champions. Exploration Company CEO Hélène Huby highlighted ambition gaps and practical obstacles such as inconsistent stock-option regimes, arguing Europe needs strategy before “regulation,” especially in space.
Montenegro’s Prime Minister Milojko Spajić framed EU enlargement as validation of the European model but urged execution discipline: politicians must “be a manager,” tackling court delays, enforcement uncertainty, and capital markets union. The shared optimism rested on Europe’s talent, values, and resilience—provided leaders translate consensus (including Draghi’s recommendations) into action.
Hello everyone, I'm Francine Lacqua and we're live from Davos now. Europe's productivity growth has largely flatlined, weighed down by a lot of under-investment, also fragmented markets and rising costs. As highlighted in the Draghi report, the continent needs probably to boost financing for innovations and defence, whilst also continuing to show leadership in the clean transition, responsibly sustaining its social model and benefiting from its high skilled workforce. And then you layer on top of that, of course, the Trump complexity with the latest threats now rescinded of extra tariffs. So what is the way forward for Europe. I'm delighted to be joined by an all stellar panel. Michel Martin, the Taoiseach of Ireland. Nadia Calvino, president of the EIB. Nicolas Hieronimus, the CEO of L'Oreal. Prime Minister of Montenegro. And Ellen Hübbe from the Exploration Company. So thank you all for joining us. Taoiseach, I think it's fair that we start with you. You're in charge of Ireland. There have been we'll talk about productivity and what Europe can do better. But it's been quite a week for Europe. A lot of European leaders feel like maybe they've been pushed around by the US. I know everything is being deescalated, but does it change your plans for Ireland in terms of more independence, supply chains and the way forward?
Well, actually, to be frank, I mean, the the European and American relationship is a vital one. There is total there is very significant interdependence. There is significant interdependence all over the world. We are in a difficult space globally. It's a changing world. And there is from our perspective, I think we have to be consistent in maintaining our focus on multilateralism. And Ireland will do that. Europe will do that. But also, yes, there is a sense that we have to become more self-reliant in Europe, and develop stronger capacities, become more competitive. There's a lot we can do ourselves. We have a lot of barriers internally in Europe, in terms of competitiveness and trade. Still within Europe, it's estimated, I think the Draghi would have said, it's more than any tariff imposed, the level of barriers that we've created, within Europe in terms of different sectors. So I think that's the first thing. I think we need a capital markets union. We need to really move on that now with pace, we need more enlargement. I think the geopolitics demands momentum on the enlargement front. And Ireland's very committed to that and support that. We hope Montenegro, will be, hopefully when we assume the presidency that by the end of our presidency at the end of 2026, that we'd have completed most of the chapters pertaining to their accession. These are all important issues for the geopolitical sense. But the de-escalation this week was very important. I think Europe's positioning was important. The unity that was on show within the European Union. But what's critical is that we work now to maintain that relationship because the alternatives really can't be contemplated.
Is Europe overreliant on US investments, and are you working on new trade partnerships, and if so, with who?
Well, we have I mean, already there has been significant work with Canada, with Japan, and there's been challenges on the Mercosur front, to be honest with you, we had difficulties as well on the farming, agriculture. But yes, India is on the horizon in terms of a very significant trade deal between India and the European Union, and others, Australia and others. So there has been a counter movement, if you like, developing more trade deals as an element of protectionism has come in and as tariffs have been imposed. But we managed to navigate the tariff issue. Let's be clear, Europe did with the US in a way that achieved a landing zone, if maintained and secured and not changed or deviated from, it does give us a pathway, to a sustainable relationship.
First of all, I mean, the way forward, because when you look at growth, it's again, it's international, it's trade relationship. And then we'll focus on domestic. But what's the way forward for Europe.
Well two two reflections from my side to follow up. And I can pick exactly where the Taoiseach just you know made his comments. I think in Europe our main strength is our unity. It is our internal market. And in this context, I think we need to be united and have a pragmatic approach when we can, but also be firm when we must and we can be firm. That brings me to my second point, which is you outlined the challenges. Francine. You know, we keep being bombarded about the challenges, but what about the strengths that we have in Europe? Are you going to be talking to very important companies? Europe is leading and is is one of the leading countries. And our companies are some of the leaders in areas which are quite critical for the future, from aerospace building to quantum computing to health to, you know, research in many areas, our universities, our research centers are second to none. There is a very vibrant ecosystem of startups. Europe is not a superpower when it comes to security and defence. We have been relying for the last 80 years on this protection and this relationship with the US, which I fully agree with you, is critical. It is indispensable. Partnerships go both ways. I would argue that this partnership is needed on both sides of the Atlantic, and is beneficial to both sides of the Atlantic, but it is clear that we need to reinforce our capacity in the area of security and defence. I wouldn't I'm not surprised because the European Union is a project for peace, that we're not a superpower in that area. And, but we need to and we need to work on it. It will take some time, but I'm quite confident that we will be able to be much more independent when it comes to energy, when it comes to security and defence, those areas where we maybe were weaker and then, well, Europe will punch its weight and have an important role in this new global order. And I think to the benefit of the world, because we are a beacon of stability, democracy, and we are also a trusted partner that is being called upon by companies and clients. And and I'm thinking like an EIB client when I say countries, governments around the world, because they know that we can be a force for good, you know, in this, in this environment.
I like that we'll come back to it. Maybe we should be thinking about, you know, the EU as a company and what should be done to to attract more investments. But Prime Minister, you know, Montenegro aims to join the EU by 2028. First of all is everything to plan and how much of a priority is this for the government?
Absolutely. So everything so far has been going on plan. We've accelerated, immensely in the last two years, the accession and just the fact that so many countries want to join European Union, showcase that EU actually has a lot of value to it. And, it's a peace project. It's a project of values, common values, as well as the single market. So, especially the countries we come from, the region that was very fragile and had like a lot of conflict in the 90s. We value peace, maybe way, way, way more than, than some people who take it for granted. You know, we see the through the Russian aggression in Ukraine that things have changed and people started understanding actually how peace is important to the to the higher project. But again, maybe not only talking about the benefits, talking about the challenges is also also very important. And how can Europe, go further? I mean, it's not in my position as still not not a member state, but like as somebody coming from private sector, and coming from the outside, I could say that fragmentation of the market that, Draghi's report has, has, I think hit the nail on the head is something that is very important to tackle, I think because of the AI, I think because of the geopolitics. We couldn't talk about AI a lot these days. Unfortunately, I think the biggest benefit of AI will be EU and India, for example, the countries that had consumer markets that used to be very fragmented by culture, by language, by many other things, AI will help us bridge these things. So we will we will be able to catch up with the markets that are not as fragmented consumer wise, like us and China, for example, that have single language, single, you know, very similar culture, etc., etc.. So EU has a big chance to be the biggest benefit of unifying the market through the AI as well as, you know, like there are some other things I think that we could learn from the, you know, politics has to involve more business people and people with, having in the Congress, you have a lot of people with the business background in Europe. We still in parliaments oftentimes we we still don't have as many business people with business backgrounds of people with, with that kind of mindset. So I think we need the pressure from within for the change. We all know we have to make that EU has to change that EU. But we need also like people who will execute the change and make the real difference.
Okay, so now we go to the business, right? You you're in charge of one of the biggest companies in the world.
The biggest.
The biggest.
And you're headquartered.
And your headquartered in France. Like are you frustrated by some of because then we have an entrepreneur. But what are you frustrated for in Europe and what do you love about doing business in Europe?
Well, I think first of all, just to to build on Nadia's point, it's important to remember that we have champions in Europe and that you can be a European company, you can be based in Paris and be a global leader. Actually, the beauty industry, which is not often mentioned, is an industry where out of the top seven global players, five are Europeans, L'Oreal is the number one. It's €180 billion GDP contribution, 3.2 million jobs. So it's a big industry. And it's true that L'Oreal is number one in Europe, but it's number one in the US and number one in China. So it is possible. It is possible as long as you innovate which will tie to the discussion, around unique capital markets. And how do you fund innovation in Europe? As far as we're concerned? We're very proud to have been, you know, named Europe's most innovative company by fortune. This year we have like 125 patents. So a lot of innovation there. But today we feel. And going back to your question about the frustration that Europe doesn't support its champions enough. And that's all the discussions around regulation. As you said it, Draghi report was very clear. And I, I hear a lot of alignment on the need for simplification, for reduction of regulations whilst protecting our values. But there's no speed, there is no speed. It's not happening. And and you know, we can elaborate on EU being run as a company. But there's a clear decision process issue that that prevents things from happening. And you know, the title of the, of this panel was, Europe's Treading Water. How can he make waves? The problem with water. wave. Right now, there's a lot of current, whether it's technological or tariffs. And if you don't swim fast in currents, you get carried away and you sink. And my my message is how do we. My question is how do we make Europe's decision process much faster so that we truly support our businesses, both the ones that are already winning and of course, the new tech and the new ventures that will need capital.
But why is it slow? Because it they need to find the right policy, or it's because it's slow to implement or because you need consensus.
I think, you know overall, first of all, it's, you know, 27 countries.
It's a structural issue.
It's a structural issue, 27 countries and more to come. A parliament, a commission, a council. And and it takes forever. I mean, look, I'm not an expert on the details of Mercosur, but I know it's been lasting for 25 years. And I heard the news yesterday that the parliament was, you know, challenging the validity of this deal to the European Court of Justice. So that that is, I think, a demonstration of the complexity. And I have a lot of respect for the politicians who have to deal with it. But but it is too slow.
Okay. We'll get to the politicians in a second. But I mean, you're often called the Elon Musk of Europe, right? You're kind of like a great hope for space exploration. How does it feel like to be an innovator and entrepreneur working within the European framework?
Yeah, it's first and foremost it's a responsibility because indeed we've been so far very successful. The company is 40 or half years old. We've been able to raise the bigger seed, bigger series A, bigger series B ever raised by a space company in Europe. This is more than 300 million. In the past, actually 12 months, we raised 250 million. And 100% of this fundraise is European. So this is a message of hope. And we've signed almost 1 billion in contracts for a product that never existed in Europe, which is a space capsule. So in three years from now, Europe is going to have its first space capsule. And actually, it's going to be it's going to be co-financed by private investors and public money and from private investors to the highest extent in the world. Like the Dragon capsule, space was financed ten, 15% from private and like 85% from NASA. We are financing 40% of our capsule with private money and 60% only with public money. So to come back to your to your point about, let's say, perhaps hopes for Europe about what we have great and also like hurdles that we are we are seeing as entrepreneurs. Hurdle is like sometimes the lack of ambition and focus.
Sorry.
The lack of ambition and focus. I really would love our institutions to think big. How can we build global players? Because in space or in defense, it's a shared responsibility between companies and governments, and we have money like we're able to invest billions in projects, but sometimes we invest billions in projects. We are not. We are not leading world leading projects. And sometimes with billions like a little bit here, a little bit here, a little bit here. So I think it would really help to keep the focus, which comes to my second point. We have a lot of people trying to regulate in space. For example, we speak now about European space law. I'm not sure this is what we need the most. What we need the most is probably a European space strategy, which enable us to become number one in the next 10 to 15 years, and I would love more people to work on the strategy rather than the regulation. Yeah. And the last point is we have some financial people here in the room. I'm trying to attract the best talent in the world, and I can tell you the system of stock options in company. There is one in Germany. Nobody understands, one in France, nobody understands. And so if we want to bring back the talents and what people, you know who've been working at space X, coming now in Europe to sustain our mission of building space vehicles across countries? Well, I have to explain to them, to their wives, to their husbands how the stock option system of a startup is working in Europe. So I would love we have one common stock option system, which is more attractive than the one which is United States. And this is how we'll be able to attract talents here.
Do you ever wish you were based in the US?
I decided to build this company, starting with Europe, to scale it in the US. So we are in the United States, we are in the UAE. We want to be a global leader with European roots. And why did I do that? Because I believe in Europe, and I believe it comes back to what you were saying about peace. The mission of our company is to build space for humanity. It means every vehicle we built capsule first and then rockets. We built it across nations so that we can share critical military and and civil technologies across these nations. So we want to scale the European model of collaboration across the world. And that's why we started in Europe, because I think that's really important. Space is the future of humanity. We can decide to build it in a confrontational manner. And of course, some will do it because this is our human nature, but we can decide to build it in the way we've built the European Union. And this is what we're trying to do with the expression company so far, successfully, actually.
I mean, if you know, what would you do? What would you change tomorrow if you didn't need unanimity, full stop?
I mean, I think, I think the single market, in my view, I think the capital markets union, are personally and there are political challenges. I mean, you're correct. It's a structural it's democracy too, by the way, which is a positive and one of the most positive things Europe has going for it is it's a beacon. It's a bastion of free speech, freedom of assembly. All of these things are very valuable, strong culture. A lot of people want to come to Europe to live. A lot of people want to come to Europe to work. So those are the fundamental strengths. But I think from a competitiveness point of view, certainly like somebody omnibus simplification measures that have already been introduced by the president of the commission have been slowed down in Parliament or have been not supported. And that's so that multi-layered structure is a problem. We're not a company. We're a 27 member states, all political entities, polities that have parliaments and so on. So this is complex and, and and that's challenging in terms of efficacy and getting things done quickly. On the other hand, when if you go through Covid 19, European Union probably responded more effectively than anybody else in the world. In my view, in terms of export authorisation, it didn't prohibit the export of any component part of vaccines. It was the strongest donator of vaccines globally. And I think it did a fantastic job working with industry. I was a health minister in the early 2000. That level of coordination between the commission and industry was not there wouldn't have been there when SARS erupted. It was there during Covid. I pay tribute to the president of the Commission, Ursula von der Leyen, and others. I think that was a very effective partnership. And Europe showed its strength and what it's capable of doing. And remember, the key vaccine, one of the key vaccines was BioNTech, the European vaccine, actually Pfizer. And that's a good partnership. You know, they were a mega company. They managed to, distribute market and so on. It became known as the Pfizer drug. It's kind of interesting, but actually and it was a good combination and a good partnership. So I think those are illustrations of what can be done. But we do need on the entrepreneurs side, we do need more VC availability, venture capital and so on. And companies do need and there is that sense in Europe that it's not as freely available to SMEs as a lot of our companies. Some of their orientation is us in terms of venture capital. And that's, that's, that's a problem. That shouldn't be the case. We've had discussions in some sectors, like health, for example, where there are significant barriers where you have almost 27 individual competencies, and in terms of regulatory bodies and so on. And so there are clear areas where we can simplify and there's a political will to simplify. Definitely. There's a will in the commission to simplify regulation. But the problem was referenced earlier of how you get through the different structures is the is the challenge.
Nadia Calvino, is it structural or is it also just the political cycle? Right.
Well, I very much agree with what has been said that in a way it's the challenge of Europe, and it's one of its strengths that we provide a message of stability to investors. So you know that there's not going to be a situation as we leave with some other superpowers in the world where you wake up in the morning and you wonder what happened, and then by lunchtime, maybe it has changed and by night it's a different policy. So Europe is is trying to provide a very different message. It's one of a beacon. It's an anchor, an anchor with a swivelling chain so it can move. But your bases, your values are very clear. And I was thinking about this when Nicola was talking about their currents and the winds. In that kind of situation. You know what you need a clear compass. Where are you heading? A strong leadership, which I hope tonight, you know, we will see this strong leadership and everybody rowing in the same direction. And I think that is the recipe for our success. And the second thing I really wanted to share and the diagnosis of what needs to be done, market integration, large scale investment simplification, and I would add win win partnerships around the world. And the Mercosur agreement is a very good example of what's going on in terms of Europe reaching out to the rest of the world and building on its strength as a world superpower in trade. A the diagnosis is clear, and what I think we need to do is to get on with it and do it. And from the European Investment Bank's perspective, we're trying to contribute to all of them and in particular mobilising private investment. I wanted to just mention this venture capital issue because indeed Europe is in a certain sense, and we had discussed this in one of our meetings, is the incubator of the world. So we have excellent startups, excellent ideas, technologies, talent. But then when these companies need to scale, they don't have a totally integrated market. And they cannot they cannot find 500 million, 1 billion that may be necessary at a later stage in growth stage of of their, of their cycle. And that is an area where if we're going to try to, to the maximum to make a difference from the European Investment Bank, to be a catalyzer, to try to reach the necessary scale for Europe to also overcome that, weaker part.
I'd like to. And then the Prime Minister. But, Nicola, I mean, when you deploy capital, is it more expensive to do so in Europe than it is in Asia or the US?
No, not not particularly for us. I mean, we have to say I'm not sure we are very representative because we are a cash rich company. We generate a good cash flow. So we don't have particular issues in, in deploying capital for us. You know, going back to the the topic of, of of discussion of speed, it's true that decision making in, China or the US is faster for very good reasons. And I'm, you know, I'm an absolute passionate European. My mother worked for the European Space Agency, so I'm like, totally, I've got the blue flag and the stars tattooed somewhere, but that's why I'm, you know, I'm so eager to find ways to, to to find solutions. I totally agree with you that there has been some movements. There have been some omnibuses that have been launched, which is not a decision, which is a process to get to a decision. But at least, you know, as far as our industry is concerned, some absurd bands that were in the in the making, like ethanol, you were talking about the Covid, we were manufacturing hydroalcoholic gel for everybody in, during Covid. And because ethanol is potentially alcohol carcinogenic in drinks, it would have been forbidden in fragrances in hydroalcoholic gels that has been pushed back. But things that, which I've already talked about last year, which is the Urban Wastewater Treatment Directive, and I think there are some pharma people in the room. Two, two industries alone have been deemed responsible for all the pollution of water, which is pharmaceuticals and cosmetics. No detergents, no pesticides, no food, no caffeine, nothing. And that's been voted. And since then, we've all been trying to you know, everybody agrees that it's not fair. We are totally in favor of the polluter thing, but everybody that pollutes should be paying. And that's typically something that's been where have most European leaders saying, yeah, you're right, it can't be just two industries that are going to pay the bill. But nothing, nothing moves. It's not even been put in the latest omnibus. So that's that's where I you can feel a little bit of frustration, despite my blue tattoo, is that I wish we could find a way to be a bit more. A bit more fast.
Yeah. Prime Minister, how do you think leaders should rebuild trust around growth?
I think so, in regards to the competitiveness, I'm not 100% sure that actually it requires 27 states or 28 or 29, 30 states. That's number one. Number two. Also, it's it's very important to know that everybody, for example, agrees on Draghi's report. I never met anybody who doesn't agree. Of all the leaders, they all agree on it. Why it's not being implemented is the question. The number one, from my point of view is number one, that, the execution capability of the politicians or people like in charge in Europe is, is a bit different from the or the, the, the, the layers, etc.. That's not because here people are used to making policies and also negotiating on policies and then presenting policies. Actually, as a politician in modern Europe, you have to oversee execution of policies. You have to oversee and follow up and and be a manager. You have to be a manager. You cannot be like somebody like, oh, I'm delegating this to somebody else. You have to take in charge. You have to make the reform till the end to follow up, to see everything. Because administration as well has a different dynamics as well. They think there is a okay, this is impossible to do, etc. zillions of times the administration comes to me saying this is impossible. At least ten times I have proven them wrong. And this is this is what politicians have to do in modern Europe. Have to they are obliged to do it. Secondly, I also think, you know, even if there is a 50 member states, again, I think again, we will all agree that Draghi's report should be done. So it's it really it's not a number of states that that's making a difference.
Is it capital? Is it access to money?
All, all, all all the things that he has mentioned, capital markets, all of these things, enforcement, you know, like, courts in Europe don't function. They're too slow and, and they're unpredictable. So you have, for example, like founders who are clueless if their stock options are going to be enforceable or not. In Europe, in US, in Singapore, in UAE, in UK, you know, it's going to happen in Europe. You are clueless because the courts sometimes they can decide this, they can decide that the uncertainty around the courts and the speed of the courts is, is the probably slowest in the world. Not counting the, the, the, the countries that, that have, lower. So this is something that we have to work on the speed and the and the mediation of disputes or quick dispute resolution mechanism, something like, for example, Singapore International Arbitration Court is necessary, like arbitration is a speedier way because like arbitration wise, you can do mediation in six months. In in the case of the Commercial Court full agreement, there's a 3 or 4 years. So these are like a quick measures that we should do. And we should also encourage the, the, yes, we need a capital union. And we need also we need the market to be really single market. So.
Prime Minister, can I ask you, I mean, is this also, you know, a lot of countries are maybe distracted by trade and tariffs or I mean, how from Montenegro, how how present or not is Russia at the moment.
We have to focus if we really want to get competitiveness done. Everybody has to focus. Number one, priority, competitiveness. I think we are too much now, bogged down by foreign politics. And, okay, Europe is a big is on foreign policy. We always have to, you know, remain important. But if competitiveness is important, we it has to be for all of us, all the leaders. This is number one focus. Let's get this one right. Let's now all focus on this because we have too many topics we are focused on. And you cannot be doing too many things at the same time.
Yeah. The only problem there I mean the challenges I mean, in February, Antonio Costas convened a meeting of all leaders to focus exclusively on competitiveness. And it's kind of an away day, to do that. And that's important. But you can't ignore what's happening in the world. And so we have a war on the continent of Europe. Russia illegally invaded Ukraine. I agree with President Trump in terms of the extraordinary carnage that's happening on the battlefield, generations of young people losing their lives on all sides. It is a catastrophe. But it also has opened up security and defense issues in Europe, and it has transformed the psychological sort of disposition of Europe towards its own security vulnerabilities. We're in a world where critical undersea infrastructure is under threat, which is critical to, economic security. We have, energy connectors. All of that is and we have cyber security attacks on a daily basis. So we can't ignore that either. I think on the structural thing, there has been work in Germany. Germany has led work in terms of, okay, if we have enlargement, surely we have to work on the, speeding up decision making, which we actually, even though we would be a holdout country for DeVito on tax and things like that, for example. Nonetheless, we do acknowledge that if we have an and we support enlargement, I support enlargement all the way because we were a young country, poorest country in Europe in the early 1970s, we joined the European Union. It transformed us. So I never deny anybody the right to join the European Union, in accordance with our standards and so on like that. But we do need to look at qmv on a lot of issues. We do need to look at how we can speed up decision making at the council level at least. And and so I would acknowledge and we should be clear about that as well. Otherwise we will make it slower, we will make it more inefficient. And we cannot afford to do that. I'm positive in terms of what we can do. You're right about the political cycle. But actually the political cycle right now is strong positive disposition to simplification of bureaucracy and to commission is in the same space. So we got to work hard with the parliamentarians to make sure that whatever we bring forward at one level can get, passed at the parliamentary level.
Ellen, is there anything that you're optimistic about that you're seeing maybe a sense of urgency from policymakers or politicians?
Yeah, I'm very optimistic, actually. Number one, about the kind of talents that we are building, because I see more and more universities having a mixed curriculum with entrepreneurships and trying things, failing, doing things with their hands. I mean, here in Switzerland, Zurich and also in Lausanne, we have two amazing examples of like very, I would say concrete curriculum. And I think this is a great strength in the US, which is now more and more here developed in Europe. So I'm super optimistic about that. I'm very optimistic about also about funding. I mean, there is now this, European scale up fund which is being setting up, so this is great. And also and this is, for me, even more important, if I may, a little bit like a, you know, provocative, because public money is amazing. And I'm super grateful that the fund is happening. Private money is also very important. I don't want that to become a country. I'm speaking about Europe because I also have a blue flag, which every time we want to do something, we ask for permission. Or we ask the governments to help us. Like Musk built Starlink without asking any money from the states first. And this is, I think, the mentality we need to have, and this is why I'm so hopeful, is that we have now second, third generation of entrepreneurs who are building funds here. And I can tell you, because I have most of my board is actually entrepreneurs and who were like super successful, like building wise, transfer, building, Skype, etc. and they are now reinvesting in Europe and they are sharing with us their knowledge. And this is so important because we need these know how to scale our companies even faster.
I mean, you know, growth is also having great thinkers in your country. Do you think because of what's happening in American universities, maybe this is Europe's moment to attract talent?
We are attracting top, top talent. We are having actually in our company, people leaving the United States because they want to contribute to something bigger. And since, you know, we have this collaboration mission at the very core of our company, some people left Space-x or some top talents of NASA decided to join us because of the mission. So we are seeing that on a daily basis.
I just think human capital is the key to the European Union's future, and that's why the horizon program, ERC in the next budget, the next seven years budget that we're going to work on this year, we've got to prioritize, funding and research and development funding and education, and the development of human capital and try and run counter to the debates that have risen about migration and stuff like that. We need to be very clear. If we do not develop the capacity to attract human capital into Europe, we will not grow as an economy. We're we're successful in Ireland on this. So far we're very conscious of the challenges, but the attraction of, high quality people that can work in industries such as your own, I think is critical. I think horizon, and that's where Europe needs to invest more in.
I wanted to just just make a connection between some of the points that have been put on the table, because the example of vaccines ticks, many of the boxes that we're discussing. Europe is becoming a refugee refuge or a sanctuary for researchers around the world. Well, if you see that in your country, you can no longer research in the area of vaccines, you obviously you come come to Europe. We, did develop the vaccine, in during the Covid pandemic. I remember I was a minister at the time. I remember in January or February they said, never will we have a vaccine in less than 2 or 3 years. By December, people were getting vaccinated. And you know what we're doing right now? And the European Investment Bank is transforming pledges into money so that we can build for vaccine manufacturing capacities in Africa. So not just supplying vaccines, but allowing them to develop this capacity, one of them with BioNTech in Rwanda. So actually a lot of things are happening that are contributing to a strong role of Europe in the world. But, you know, we're treading the water, but how to make the waves? And I'm very grateful to have this panel because at least we can communicate in this very important forum what actually Europe is doing in so many areas that gets bogged down by the noise. And I would also want to to emphasize the point, you said focus. You said focus, said focus. We really need to try to avoid being trapped by the daily noise. Deal with the priorities, and bringing peace to Ukraine is number one, I totally agree. Then competitiveness and then get simplification. Done. And then I think the, the power and the potential of the continent, I mean, we've lived it through history. So, you know, if we're united, I always say we're unstoppable. And I rest my case.
So, I mean, the the case of Russian aggression in Ukraine is absolute priority, obviously, but but it also a case for more Europe for more for defense union for for more united front. And that is actually a, it's a, it's a galvanizing factor as well for, for, for other other things. So for me, for somebody that that was like as an economist or it's unbelievable that Europe could come up with monetary union but cannot come up with some other unions that are much easier, actually, because monetary union is the is the is basically the highest degree of sovereignty of a nation, right? Printing your own money, having your own currency. But you gave up on this, but you cannot give up on something that seemingly much more, much more simple. That is kind of a paradox, especially in the modern world as as a fiscal policies with so many mandatory costs that the state has to pay social salaries. You know, now, defense and all of the other things, your capability to manage fiscal policy is not, you know, it's is it centralized in Brussels or is it done at the national level? I don't know how much value is in keeping it national level vis a vis making it federal. So I know a lot of people are going to be controversial.
Steady, steady, steady. But it's.
It's one step at a time and fully agree. You know, but again, again.
The danger. Yeah. It's the balance between I mean, the bottom line is democracy. You have to be connected to the people on the ground as well. So it's a really I mean, it's an interesting and by the way, we have Brussels overlooking, you know, the commissioning, how much you're spending. The we now have the, the new midterm, sort of program that we submit to Brussels in terms. But countries have been varying that since time began, you know, and big countries as well as smaller countries. And, but it has created some degree of fiscal framework and discipline at a macro level, which is important. But to bring the people with us is very, very important, because if you get too distant from the people, the entire project gets lost eventually and the edifice comes tumbling down. I said, this is a politician who studied politics. And we have a very we have an electoral system that's very creates fragmentation by definition. But still it's given where we are in current politics, I'm not so sure that would bring the people with us.
Let's not forget that because it is extremely important. Okay. We have five minutes left. And actually, to each of you, what are you most optimistic about? Growth potential of growth in your industry or in the EU in the next 12 months?
Well, you know, I think first of all, we see that despite everything, the economy is pretty dynamic. The FMI just increased its forecast for 2026. And if I look at Europe, I think, you know, according to everything we said, we have the talents we have, I think values that are attractive to these talents. We have innovation capacities, we have the biggest markets. And so it just takes really playing as a team. I was talking about Team Europe last year, and I think if we can really play as a team that acts fast, I think our growth potential is huge because, you know, I see in my field in beauty, you know, French or European beauty is something that makes everybody dream. So we have a lot of things that we can offer, whether in space or in cosmetics or in health. And I think that's what makes me optimistic. So I'm very confident and bullish for my company, even in this context. And being a European company.
What are you what are you most optimistic about for for the next 12 months for Europe and your industry?
Yeah. So for for space in Europe, I'm actually very optimistic around the capacity to finance ambitious project. Because the pressure we have, it's a question of life or death. And I see that we start thinking more and more united. I'm optimistic also around and I said a few words about that before the talents. We see new mentalities of young people coming with a very strong entrepreneurial spirit willing to make a huge difference. And the last point, and perhaps I will surprise you, but I want to say I want to stay optimistic about the transatlantic collaboration. We are growing very fast in the US, and I'm in talks with NASA and the European Space Agency to build a transatlantic man rated capsule, because I believe that what we're seeing now is some, you know, somehow you were you were talking about current why not, you know, a tsunami. But I want to plant the seeds for the future. And I strongly believe in the Democratic collaboration between the United States and Europe. And I think that we also need to act hopeful, not naive, but hopeful, because that collaboration is important for the world. And so I don't want to think short term.
Do you think we'll get something more concrete in the next 12 months?
I mean, let's just imagine that, for example, in the next month we could agree on a sorry, I'm taking my example because we're working in space, but we could agree on a collaborative transatlantic mind capsule program between us and Europe. What does it say to the world, what kind of hope it brings? Right. This is awesome.
If I may, referencing because you were mentioning the interconnection, I think I was talking about French or European beauty, but Laura has got 20 American brands in its portfolio that we're exporting to the world. So it's really it's. absolutely we are a global company with global values. And this I'm totally in line with the lens on on the need to have this very strong connection with, with North America.
Prime Minister, what are you most optimistic about for the next 12 months for European growth?
So I think Europe is again a place, a cradle, but also a beacon of light in terms of the peace project, in terms of the values, in terms of rule of law, in terms of the human rights. And these are the fundamental things that founders or the people innovative people care about. Eventually, you know, they care. This is on a humane level, a quality of life and other things that Europe also provides for is something that eventually Europe can be a very attractive, given that we solve the, you know, like minor problems in the regulations and other things that are, that are, that are burdening. But obviously, like I think it's Europe is has a very strong case of attracting talent from all around the world, treating them fairly, treating them with respect, treating people with the, with ability to, to express themselves to, to, to creatively or in entrepreneurial way. And I think this is I'm very bullish on Europe. Again, I also want to say that I'm, I'm a big you know, I have also a big tattoo blue tattoo. So all of us, we you know, maybe we have different opposing views on some things. But again like we all wish the best and we we are very I think we are all very bullish on Europe.
Well, first of all, I would be optimistic in terms of, notwithstanding all the tension strands and difficulties and so on like that in terms of there will be progress on simplification of regulation in the next 12 months and in the years ahead there will be progress in terms of investment in research and development and in human capital. And, you know, the broader area of education, in the time ahead in Europe and also in the values of Europe, there's a battle going on in the world. But I think the values of Europe, the fundamental ones, will sustain. And the transatlantic, you know, there have always historically been different strands in America in its approach to the world, and in Europe likewise. But I would actually be optimistic in that transatlantic I have to be as an Irish man, because historically, over 30 million people in America claim Irish descent because of the famine in 19th century Ireland. So we've Irish all over America that will those relationships will sustain in the time ahead. And other European countries have similar diasporas in the US as well. And I was reminded when you were saying about L'Oreal and all of that, you know, one of my favorite films was Casablanca. Don't be. And, you know, Bogart to Bergman at the end, we'll always have Paris.
Not not Calvino.
Well, no, I think, you know.
To summarize what what the colleagues have said around the table and coming from different backgrounds. But at the end of the day, a lot of our trust and optimism is based on the.
Resilience of our systems, of our networks, the resilience of of the structure that is underneath the daily. I call it noise. You know, there are many words we can use about these turbulences, There is a strong foundation underneath. I also hope, and I have trust in the strong foundation of our democracies, because actually, I think what the Taoiseach said in terms of bringing the citizens with us and the rise of populism and extremism and the conflict and the the fact that we have angry societies, I think is probably one of the key challenges in terms of the structures. But I have hope also that that will also be resilient so that then we can, you know, make reality all those, beautiful words that, that you have and wishes that you have put on the table. And I want to finish with these, on a daily basis, Europe continues to be the best place to live, particularly if you're a woman. I want to to also emphasize this point. And and that is also a very strong strength in this brave new world.
Well, thank you all for a wonderful, engaging panel and I wish everyone a great rest of the forum. Thank you. Thank you, thank you.