Reference News Network, July 10 report - The Spanish newspaper "El País" website published an article titled "Europe's Difficult Technological Revival" on July 6. The author is Andrea Risi. The article is excerpted as follows:

The world is undergoing a historic transformation, in which Europe is increasingly aware of the need for greater autonomy. The Russian offensive against its eastern wing, and growing doubts about Washington's commitment to Western military protection, have led to a sharp shift in European mentality. German Chancellor Merkel has made this view concrete, declaring that Europe needs to be independent of the United States. However, in today's world, any plan aimed at avoiding dependence or subjugation requires high-level capabilities in key technologies such as artificial intelligence, quantum computing, and space technology.

An event that occurred this March vividly illustrates how important it is to possess certain technological capabilities. At that time, Musk posted on the social media platform X emphasizing that his satellite internet service provider, Starlink, was the "backbone" of the Ukrainian armed forces. The tech magnate wrote, "If I cut off this service, their entire front line would collapse." In this case, Europe was not relying on allied governments, but directly on a foreign private enterprise. Therefore, even with a large arsenal, it is not enough to ensure security without the necessary key technological conditions to efficiently utilize military resources.

The reality is that Europe lags behind the United States and China in key technological fields. A recent report from the Belfer Center for Science and International Affairs at Harvard University found that the United States leads in five key areas (artificial intelligence, biotechnology, semiconductors, space technology, and quantum technology). China ranks second, with particularly strong strength in biotechnology and quantum technology. China is narrowing the gap with the United States in certain areas and may even surpass it. European countries are far behind. Harvard estimates that European countries' capabilities in these areas are equivalent to half of the United States and two-thirds of China, especially lagging in semiconductors and space technology.

The US dominance is mainly due to its unique financial ecosystem, its great attraction to foreign talent, and a business culture that highly values innovation. China's progress is largely attributed to the country's firm will, strong execution capability, vast market size, and abundant human resources. Europe lacks both the depth of capital markets and a strong and unified political will.

The existing fragmentation in the financial sector remains a key obstacle on the path of Europe's technological revival. Former Italian Prime Minister Letta pointed out in a report that this fragmentation reduces the profitability and efficiency of the European market, causing approximately 300 billion euros of European savings to flow into the US market each year, drawing resources away from this side of the Atlantic and providing substantial funding for commercial projects on the other side. The public sector can drive initiatives and support projects, but without effective private financing, Europe cannot achieve real progress. In March this year, the European Commission launched a package of measures to make progress in perfecting the single financial market, but the road ahead looks very difficult.

Another key obstacle to Europe's technological revival is its heavy reliance on strategic raw materials such as lithium, cobalt, and rare earths. In this regard, China holds a worrying dominant position. This advantage could be used as a tool for pressure. In 2024, the EU approved a law aimed at improving the capacity for mining, processing, and recycling of these raw materials. Brussels will regularly monitor the level of dependence on these materials. These measures aim to enhance self-resilience, but given China's dominant position and the European society's rejection of mining activities, this path also seems full of challenges.

Europe has also launched actions targeting specific industries. Perhaps the most notable is the Chips Act, which came into effect in 2023, aiming to enhance Europe's advanced semiconductor design and manufacturing capabilities. The EU's goal is to increase Europe's chip market share from the current 10% to 20%. Experts point out that this is a difficult target to achieve. Intel has decided to delay its plans to build large chip manufacturing plants in Germany and Poland, further increasing the difficulty for Europe to get out of its predicament.

The huge difficulties in enhancing technological competitiveness are also related to trade policy. In this regard, green technology is a key area, which the Harvard report did not mention. In this area, especially in the automotive industry, China has made significant progress in recent years. Faced with the Chinese government's strong support for the development of electric vehicles, the EU decided last year to increase tariffs in this area to offset the imbalance caused by Beijing's actions, thereby reserving space for local related industries.

In terms of human capital, an important driver of technological advancement, there are signs that Europe is trying to take advantage of the opportunities created by the Trump administration's hostility toward universities and foreigners. In May this year, European Commission President Ursula von der Leyen and French President Macron jointly proposed the "Choose Europe, Invest in Science" initiative in Paris. The initiative aims to encourage researchers who want to or have to leave the United States to settle in Europe.

Numerous signs indicate that strengthening European integration is the only way to enhance competitiveness. For example, the Harvard report points out that if Europe has some competitiveness in the field of quantum technology, this is partly due to the cohesion promoted by the "Horizon Europe" program. However, many areas still face fragmentation. Overcoming these obstacles is not only a necessary condition for enhancing Europe's competitiveness, but also a necessary condition to avoid becoming a vassal. (Translated by Tian Ce)

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