Report by President António Costa to the European Parliament plenary session 09:25 European Council President António Costa debriefed the European Parliament plenary in[...]

Three fundamental priorities marked the first seven months of our mandate: defence, competitiveness, and Europe's role in the world.

Starting with defence. The Russian invasion of Ukraine was a wake-up call for Europe. It demonstrated that peace without defence is an illusion. NATO is indispensable. But the European Union has a clear added value, in fact it has a fundamental role, and it is ready to assume greater responsibility.

That is why the European Council has approved a work plan towards achieving defence readiness by 2030. First, giving member states more fiscal space and funding through the SAFE program to allow for more ambitious defence spending. Second, ensuring that member states can spend better, through standardisation, aggregation of demand, harmonisation of requirements and joint procurement. Third, looking at defence as a driver for competitiveness, boosting research, innovation and developing a real industrial policy on defence, with more private investment supported by the EIB.

On all these areas, we have, with the Commission, achieved progress. But we can - we must - do much more, acting together as Europeans. As we invest more, we don't need to multiply the same capabilities by 27. We need to implement a common defence system, investing together in strategic capabilities like air defence, maritime security, space or cyber.

I'm not talking about a European Army. I'm talking about common goods operated by our national armies, according to a common plan. Gone are the days of futile discussions about the roles of the EU and NATO in building the Europe of defence.

It is now clear that, strengthening European defence is the best way to preserve a stable transatlantic alliance. Building the Europe of defence is not a slogan; it is a duty. A duty to protect our citizens, uphold our values and defend our future.

Secondly, on competitiveness. A more competitive Europe is a safer, more resilient Europe. A more competitive Europe is essential to attract more investment, create better jobs, strengthen our economic resilience and underpin our social model. The European Union is simultaneously a powerful Single Market and a powerhouse on trade.

As Mario Draghi has underlined, defence and the energy transition are the main drivers to boost our competitiveness. In fact, the green transition is Europe's chance to lead, to modernise our industry, to create clean jobs, to reduce energy costs and reinforce energy security.

And it is, of course, crucial to tackle the existential threat of climate change. Because we can stop the clock on European rules, but there is no stop the clock for climate change. That means we cannot reduce our ambition and give up on our climate targets.

But to reduce emissions we don't need to increase bureaucracy. We must achieve our goals, not through bureaucratic pollution, but by ensuring that no one is left behind by the climate transition.

That is why we invite the co-legislators to accelerate the simplification of the rules for businesses, and to cut red tape. It is also about addressing with realism the challenges that the middle class and lower-income citizens are facing, for example, in improving energy efficiency of their houses or replacing their old cars.

Ladies and gentlemen, there is no competitiveness without trade. The European Union will only lead in innovation, deliver prosperity and good-quality jobs, and attract talent, if it pursues its ambitious fair-trade agenda with partners all over the world.

We are the largest trader of manufactured goods and services in the world. We have built the most extensive network of trade agreements, covering 78 countries, and growing. We are advancing negotiations with countries like India, Indonesia, Thailand, Malaysia and the Philippines, and others.

Since last December, the Commission has concluded the political negotiations with Mercosur and for the modernised agreement with Mexico. The Mercosur deal alone will form the largest free-trade zone in the world, a market of over 700 million consumers. It will boost investments in Europe, strengthen strategic industries in Europe and create jobs in Europe.

We must therefore focus on the long-term benefits for Europe. Policymakers should decide based on facts, not on perceptions. Allow me to mention one example. The Mercosur agreement's quota for beef represents 1,6 % of the total European beef production. This is also less than half of our current imports from Mercosur. This will simply not be able to destroy European agriculture.

If we want to export our social and environmental standards, the way to do it is through trade agreements. Because tariffs don't spread standards. Trade agreements do. This is the message that Europe should send to the world: while others raise barriers, we build bridges.

So, let's move forward and sign the Mercosur agreement by the end of the year. Because shaping global economic rules, forging strong partnerships, and fostering shared prosperity is in Europe's vital interest.

Finally, to reinforce Europe's position in the world it is more important than ever to intensify our diplomatic engagement in a multipolar world. The support to Ukraine and achieving the enlargement to the Western Balkans are our most important geopolitical investments. But we need to look beyond. We already held important summits with the Western Balkans, South Africa, Central Asian countries, the United Kingdom, Canada and Moldova. More are to come: Japan and China in July, Egypt in October, as well as Latin America and the Caribbean and African Union later this year.

In a time of fragmentation, the rules-based order needs defenders. Credible defenders, that uphold it consistently, without double standards, whether in Ukraine, the Middle East, or anywhere else where fundamental principles are at stake.

Europe is the credible, predictable, and reliable partner that multilateralism needs. Whether at the United Nations, the G20 in South Africa, or COP30 in Brazil, the European Union will be there - not as a spectator, but as an actor that shapes outcomes.

Europe has shown that it can act, not just react. The European Council has been guided by unity in the diversity of our nations, working hand in hand with the Commission and this Parliament. Thank you dear Roberta, thank you dear Ursula.

Together we are strengthening our defence, reinforcing our competitiveness, and defending our values and interests globally. You can count on the European Council to continue on this path. Because our citizens expect protection, prosperity, and purpose. We must deliver together.

Thank you.