The Budapest Declaration can be regarded as the European Council's response to the Letta and Draghi reports. However, even though these two reports are highly praised in the declaration, only some of the ambitious contents made it into the final version. The content of the text is based on the European Council’s Strategic Agenda and contains many, if only  few specific commitments – especially in the social field. 

Focus on Competitiveness
The key element of the Budapest Declaration is the strengthening of Europe's competitiveness. The range of topics addressed is broad. In many cases, existing goals or ambitions are listed without shedding any light on the path to their achievement. The deepening of the single market, the new Savings and Investments Union and the development of a new European industrial policy to ensure industrial renewal are paramount. However, the industrial base should also be strengthened to improve defence preparedness and capability. As regards to research and innovation, Europe should be a global leader; the work on the ‘fifth freedom within the Single Market framework’ for research, innovation and education proposed by Enrico Letta is supported. Once again, the swift presentation of proposals to reduce the reporting requirements of companies by at least 25% is also called for – a blanket demand that the AK views very critically.  

Along with these core areas of the economic modernisation strategy, the key strategic objectives of the ecological transformation and the European Pillar of Social Rights are also confirmed. A genuine energy union should contribute to energy sovereignty and climate neutrality by 2050, while the planned circular economy legislation should help to create a more resource-efficient economy and a market for secondary raw materials. Better use is to be made of the opportunities presented by the data economy, while ensuring privacy and security. The aim is to create high-quality jobs throughout the Union and to strengthen the social dialogue and reduce inequalities. Trade and agricultural policy should be guided by the principles of sustainability and resilience. Under the heading ‘Funding fit for the future’, however, there is only contains a vague minimum compromise.

Financing uncertain once more
The Budapest Declaration offers little in the way of groundbreaking approaches on the subject of financing. It mentions the upcoming multiannual financial framework (MFF), the much-vaunted Capital Markets Union (CMU)  and the involvement of the European Investment Bank (EIB) – all well-known and already announced initiatives. The vague efforts to develop new own resources, as set out in the draft version, were further watered down even further in the final version. Instead, the development of a Savings and Investment Union, as well as the completion of the CMU and the Banking Union, are being postulated again. The ambitious goal of completing the CMU by 2026 seems to be politically difficult. The necessary essential reforms  have been discussed for years without success.

The adopted final version of the Budapest Declaration clearly shows that it is a slimmed-down compromise proposal. Specific goals were toned down on the final stretch. For example, the investment target for research and development was reduced from 4 % of GDP to 3 %, and the target for finalising the Energy Union in 2027 has been completely removed. Overall, a great deal of ambition seems to have been lost in the negotiations. Where the draft declaration still mentioned the goal of becoming a global leader in the circular economy, the final version only refers to the Circular Economy Act, which had already been announced. The final declaration also failed to include a harmonisation on taxation, as demanded by AK.

No mention of social investment
AK welcomes the emphasis placed on an active industrial policy. The goal of creating high-quality jobs as well as the commitment to strengthening social dialogue, equal opportunities and reducing inequalities are of course also supported. However, what is missing is a clear picture of the role that workers can play in shaping a competitive Europe. The green transition of Europe's economy can only succeed if employees are sufficiently involved. But aspects of a just transition are rarely discussed; the term  ‘Just Transition’ is not mentioned in the declaration at all. The Budapest Declaration emphasis the need for investment, for which both public and private funding should be mobilised. However, with the exception of investment in skills, there is no mention of social investment, for example in care or childcare. From AK’s point of view, these are essential, not least to approach skill shortages and develop talent in Europe.

Further information
European Council: Budapest Declaration
AKEUROPA: Strategic Agenda 2024-2029. Imbalanced priorities
AK EUROPA: The Draghi Report. Competitiveness at the centre of EU policy
AKEUROPA: Political Guidelines for the next EU Commission 2024 - 2029. The right answers to current challenges?
AK EUROPA: The Draghi Report. Competitiveness at the centre of EU policy
AK EUROPA: "Much more than a market". Leave no one behind in the Single Market
EU Commission: ESDE Report