There’s nothing unique about the European single market? Never mind, the president of the European Commission, Ursula von der Leyen, is going to add a new level of regulation--the 28th regime--which will make it possible (on a voluntary basis) to operate with identical rules in the member states and thus to do away with 27 versions of different regulations. A from the commission stated that a “proposal for a 28th legal regime will simplify applicable rules, including relevant aspects of corporate law, insolvency, labour and tax law, and reduce the costs of failure. This will make it possible for innovative companies to benefit from one single set of rules wherever they invest and operate in the single market.”
The president of the European Commission did not really go into detail about how this initiative “on top” of existing legislation would work, or even how businesses would be able to secure their legal environment, but it does demonstrate the new methodology that the new European Commission intends to deploy in the face of the many criticisms levelled at it.
The competitiveness compass presented in Brussels on Wednesday 29 January focuses on three pillars: closing the innovation gap, having a common roadmap for decarbonisation and competitiveness, and reducing dependencies and increasing economic resilience and security. Key horizontal and cross-cutting enablers were mentioned: simplification, reducing barriers to the single market--our greatest asset in a world of giants--financing competitiveness, high-quality skills and jobs, and coordination.
“Europe's industrial structure has become too static, with too few start-ups emerging with new disruptive technologies,” von der Leyen. “Europe’s global share of patent applications is on par with the United States and China. But only one-third of these are commercially exploited. And that makes the difference. And only a small share of EU businesses are seizing the opportunity of digital change. If you look at our companies, only 13.5% are using AI, so one in seven is using AI, for example. This must change.”
AI Factories, part of the response to Donald Trump
Like Luxembourg, this year the European Commission will launch “a broad AI strategy,” which will “include an ‘Apply AI' initiative to drive industrial adoption of artificial intelligence in key sectors. It will also include an ‘AI Factories Initiative,’ which basically offers to our companies the possibility to train and develop their models with supercomputers. And after looking at AI, we will also table different action plans for example concerning advanced materials, quantum, biotech, robotics and space technologies.”
Luxembourg, which learned in December 2024 that it would , is part of this network. The president of the European Commission has placed this facility at the heart of Europe’s response to the $500bn investment in AI infrastructure announced last week by the new American president, Donald Trump.
If Europe is having trouble producing unicorns, it’s because startups are not succeeding in convincing venture capitalists. “If you look at the global venture capital, only 5% is raised in the EU, compared to 52% in the US and 40% in China,” said von der Leyen. “We do not lack capital. If you look at the European household savings, it is €1.4trn per year, compared to €800bn in the US. What we lack is an efficient capital market that turns these savings into investments and the venture capital that is so much needed, particularly for early-stage technologies that have a game-changing potential.”
“This is why we will, building on a capital markets union and a banking union, present a European Savings and Investment Union this year. It will create new savings and investment products, provide incentives for risk capital and ensure investments flow seamlessly across the European Union. Of course, this is private capital, public investment will also continue to play an important role if we speak about investment and innovation. And therefore, the next European budget is our chance to refocus the priorities and of course to simplify access to EU funding.”
Green ambitions maintained, but...
Von der Leyen also maintained her ecological and environmental ambitions--whilst making a few changes to the Green Deal strategy.
“We must provide predictability for clean-tech investors and companies. Clean-tech industry is looking for opportunities. Europe is open to business. We are already a world leader in clean technologies like wind turbines, electrolysers and low-carbon fuels. More than one-fifth of the world's clean technologies are developed right here in Europe. So we have to work hard so that we stay number one. Therefore, first movers will be rewarded with investment certainty, with preference in public procurement and simplified state aid in targeted sectors. We will also, of course, work with the more traditional industries so that they are supported in the transition,” said the president of the European Commission. “Tomorrow, I will launch the strategic dialogue on the future of the automotive Industry. We will support it through its deep transition. And we will ensure that the future of cars remains firmly rooted in Europe. We will also roll out tailored action plans for energy-intensive sectors--just to speak about steel and metals as well as chemicals. We will work on the acceleration of permitting.”
Another statement that will speak to industrialists, such as by ArcelorMittal: “We have to address structurally too high energy prices and energy costs in the European Union,” she said. “In a few weeks, we will introduce the Affordable Energy Action Plan to work on the structural issues to lower energy prices for our industry.”
These are all avenues that would be meaningless if the EU did not regain some autonomy in terms of access to rare materials, which are particularly useful in technology products in the broad sense of the term. “Europe is a champion in trade,” said von der Leyen, addressing the third pillar of the EU’s competitiveness compass. “We have agreements with 76 countries. We are the largest trading partner for 72 of them, representing 38% of the world’s GDP. Interestingly, there is a growing global appetite in these times to engage more closely with us, not only because our market is big and attractive but also because of our reputation as a partner. In Europe’s offers, there are no hidden strings attached. Others may focus on exploiting and extracting, we look at investing locally along the entire value chain in partner countries and taking the finished products to the European Union. So everyone wins. With this in mind, we have launched a new generation of trade deals. They will secure supplies of raw materials, clean energy and clean tech from around the world.”
One omnibus will hide other omnibuses
Unsurprisingly, the European Commission will be presenting an omnibus on simplification on 25 February. “We have a very clear signal from the European business sector that there is too much complexity, the duration of permitting is too long and administrative procedures are too cumbersome. We have to cut red tape. We will deliver an unprecedented simplification effort. We will start with a first simplification omnibus proposal next month. This includes a far-reaching simplification in the fields of sustainable finance reporting, sustainability due diligence and taxonomy. Other omnibuses for different sectors will follow. This will be another major step in delivering on our target of reducing EU reporting obligations by 25% for all companies and by 35% for SMEs. And we want to go further. Because reporting is not the only obstacle that is there. There are other types of administrative costs imposed on our industry. So we are expanding the commitment to cover 25% of all these recurring administrative burdens, and 35% for SMEs. Our goal is that by the end of the mandate, we will have made proposals that could save companies over €37bn a year.”
A future union of skills
Europe will be setting up a Skills Union this year “to reskill and upskill Europe’s workforce in a world of a fast technology change where it is absolutely needed to have a success in our competitiveness.”
The president of the European Commission ended her speech of less than a quarter of an hour with an even more political message. “We have a plan; we have a roadmap. We have the political will. Now, what really matters is speed and unity. Speed, because the world is not waiting for us. So it is high time that we accelerate. And unity is important to really implement this political will. It is good that the European Council strongly endorses the Draghi report. We had a debate in Budapest, and the Budapest Declaration is very clear: full endorsement by the 27 leaders of the way forward.” This should also translate into a focus for European public policy, in other words, choices and the renunciation of funding for certain other European programmes. The two speakers have given no further details for the moment.
This article was originally published in .