Vulcan View: The latest EU developments 24 March – 28 March

EU presents 47 Strategic Projects to secure critical raw materials

The European Commission announced on Tuesday (25 March) a landmark initiative to secure the EU’s access to critical raw materials, selecting 47 Strategic Projects under the newly implemented Critical Raw Materials Act (CRMA). This initiative aims to reduce reliance on imports and strengthen the EU’s capacity to extract, process, and recycle resources vital for green technologies, defence, and digital industries.

Spanning 13 EU member states—including Germany, France, Spain, and Sweden—the projects will focus on materials such as lithium, cobalt, nickel, and graphite, essential for manufacturing chips, electric vehicle batteries, renewable energy systems, and aerospace components. The initiative is projected to attract €22.5 billion in capital investment, with streamlined permitting processes slashing approval times from up to a decade to 27 months for extraction and 15 months for other projects.

At a press briefing, Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy, summarised its significance:  “Europe currently depends on third countries for many of the raw materials it needs the most. We must increase our own production, diversify our external supply, and make stockpiles. Today, we have identified 47 new strategic projects that, for the first time, will help us secure our own domestic supply of raw materials. This is a landmark moment for European sovereignty as an industrial powerhouse.”

The CRMA, enacted in May 2024, sets binding targets for the EU to meet at least 10% of its annual demand through domestic extraction, 40% via processing, and 25% through recycling by 2030. By selecting these projects, the Commission is not only addressing immediate supply concerns but also contributing to the EU’s broader green and digital transitions. The strategic boost in domestic raw materials production is also expected to support vital industries such as defence and semiconductors, further cementing the EU’s role as a global industrial leader.

The projects have been carefully selected based on their potential to contribute significantly to the Union’s strategic raw material supply. They meet stringent environmental, social and governance criteria, ensuring that progress in this sector does not come at the expense of sustainability or public welfare. In addition to streamlined permitting, the projects will benefit from easier access to finance and stronger connections with industry stakeholders, enhancing their viability and overall impact.

Conclusions 

This decisive action marks a significant milestone in the EU’s broader push to prioritise domestic supply chains and mitigate geopolitical risks while advancing its climate goals. As global competition for materials intensifies, the EU aims to couple industrial resilience with sustainable growth and achieve autosufficiency. This balancing act is critical for maintaining its competitive edge and long-term industrial sovereignty as it steers the continent towards a greener future.

New ESRI Report warns of dire economic consequences for Ireland from U.S. tariffs and protectionism

The Economic and Social Research Institute (ESRI) and the Department of Finance released a report on the potential macroeconomic effects of tariffs, de-globalisation and protectionist trade policies on the Irish economy. These measures could significantly affect the traded sector, leading to negative consequences for employment, consumption, and public finances, including declines in tax revenues.

Key findings include:

• A 10 per cent unilateral tariff by the U.S. on global imports could decrease Ireland’s GDP by 2.5 per cent and MDD by 1.3 per cent.
• A 10 per cent bilateral tariff would lead to a larger decline, with GDP dropping by 3.2 per cent and MDD by 1.7 per cent.
• Protectionist measures may negatively impact Ireland’s public finances, with declines in tax revenues.

Ireland, a major beneficiary of globalisation, is highly vulnerable to rising protectionism. A slowdown in global trade would primarily impact employment, particularly in export-driven sectors like ICT and manufacturing, which account for 18.5 per cent of total employment. According to the ERSI, job losses in these high-paying sectors could reduce aggregate demand, leading to further employment declines in domestic industries and amplifying the economic downturn.

Potential job losses would reduce income tax receipts, especially since Ireland’s progressive tax system relies heavily on high earners, many of whom work for Multinationals. While corporation tax revenues are less predictable, U.S. tariffs could potentially lower MNCs’ profit margins, leading to a decline in a key revenue source for the Irish government.

Furthermore, Ireland may suffer from a loss of economies of scale due to restricted access to export markets. Ireland relies heavily on exports, accounting for 136 per cent of GDP in 2023, compared to 33 per cent for France and 32 per cent for the U.K.

Additionally, a decline in R&D investment by companies in response to a U.S.-EU tariff war would have a “doubly negative” effect on Ireland’s productivity. The ESRI cautioned that protectionist measures from the U.S. and EU would not only hinder domestic innovation but also limit Irish firms’ capacity to benefit from innovation elsewhere. In competitive markets, firms invest in R&D to gain an advantage, but with less import competition, this motivation diminishes. Various studies have indicated that competition drives innovation by lowering the cost of investing in R&D.

The report comes as U.S. Secretary of Commerce Howard Lutnick referred to Ireland as his “favourite tax scam”, vowing to eliminate the country’s “advantage” over the U.S. Appearing on a Podcast last week, Lutnick spoke specifically of the trade surplus Ireland maintains over the U.S. and emphasised that the two pillars to the administration’s trade policy are (1) tariffs and (2) ending international tax ‘scams’. Lutnick stated that Ireland has America’s IP, specifically mentioning tech and pharma companies. On Tuesday 25 March, Simon Harris held what was described as a “constructive and engaging” call with Lutnick.

Finally, on Wednesday (26 March), Donald Trump, once again, singled out Ireland’s pharmaceutical industry while discussing the rehabilitative effects of tariffs for the U.S. economy. President Trump explicitly outlined plans to impose tariffs on imported pharmaceuticals, aiming to force drug production back to U.S. soil.

European Commission launches Preparedness Union Strategy to strengthen crisis response

On Wednesday, 26 March, the European Commission launched the Preparedness Union Strategy to support Member States and enhance Europe’s capability to prevent and respond to emerging threats. The initiative comes as the EU is facing increasing geopolitical tensions and growing challenges.

The Strategy includes 30 key actions and a detailed Action Plan to advance the Preparedness Union’s objectives, as well as developing a ‘preparedness by design culture’ across all EU policies. The key objectives are as follows:

• Promoting Population Preparedness, such as encouraging the public to adopt practical measures, including maintaining essential supplies for at least 72 hours during emergencies.
• Enhancing Crisis Response Coordination by establishing an EU Crisis Hub to improve integration among existing EU crisis structures.
• Strengthening Civil-Military Cooperation by conducting EU-wide preparedness exercises, uniting armed forces, civil protection, and facilitating dual-use investments.
• Bolstering Foresight and Anticipation Capabilities, by developing a comprehensive risk and threat assessment at the EU level to help prevent crises such as natural disasters or hybrid threats.
• Increasing Public-Private Cooperation, by creating a public-private Preparedness Taskforce and formulating emergency protocols with businesses to ensure rapid availability of essentials.
• Enhancing Cooperation with External Partners, such as NATO, on military mobility, climate and security, emerging technologies, cyber, space, and the defence industry.

This initiative highlights the EU’s recognition of the increasing challenges of global threats, including geopolitical tensions, natural disasters, and cyber security risks. By integrating civil, military, and private-sector responses, the Strategy moves beyond traditional crisis management towards a multisectoral whole-society approach.

However, its effectiveness will depend on Member States’ willingness to implement these measures, as well as their ability to align national preparedness efforts with the broader EU initiative. While fostering cooperation with external partners may strengthen Europe’s collective security, it also introduces challenges related to policy alignment, funding and operational coordination.

The Preparedness Union Strategy is a forward-looking initiative that addresses the need for a more unified and adaptive crisis response system. By introducing 30 key actions and promoting a ‘preparedness by design’ culture, the Strategy aims to create a more coordinated and proactive response framework across all Member States.

Compliments of Vulcan Consulting – a member of the EACCNY