The EU aims to reclaim its global economic edge with a new strategy to spur innovation, cut red tape, and strengthen clean industry. But as Brussels pushes for growth, climate advocates warn against weakening Europe's green commitments.
Competitiveness Compass.
"Europe has everything it needs to succeed in the race to the top. But, at the same time, we must fix our weaknesses to regain competitiveness," European Commission President Ursula von der Leyen said upon presenting a roadmap to boost the 27-member European Union's competitiveness.
The so-called Competitiveness Compass is an economic strategy that involves increasing innovation, promoting clean industry and reducing external dependencies to be able to compete with global powers such as the United States or China.
"Over the last 20 to 25 years, our business model has basically relied on cheap labour from China, presumably cheap energy from Russia, and partially outsourced security and security investments. These days are gone," von der Leyen said.
To relieve businesses and attract new investments, the Commission promised an "unprecedented" reduction of red tape to cut administrative burden and simplify reporting obligations for firms by 35 percent and for small and medium-sized companies by 25 percent.
According to von der Leyen, slashing red tape could save European companies over 37 billion Euro a year.
The Commission's action plan is based on reports drafted last year by two former prime ministers of Italy: Mario Draghi (2021-2022) and Enrico Letta (2013-2014).
An experienced economist, Draghi has also been the president of the European Central Bank between 2011 and 2019. According to his report, the EU will need to invest 750 to 800 billion Euro annually to close the gap with its competitors and achieve new economic growth.
European Commission Executive Vice-President for Prosperity and Industrial Strategy, Stéphane Séjourné, defined the Compass as the "economic doctrine" for the next five years and explained that it will translate into "simplifying, investing and accelerating our economic priorities", putting competitiveness, he specified, "at the heart of every Euro we invest".
Driving innovation, (green) growth and economic security.
The Competitiveness Compass includes a series of initiatives that have yet to be developed into concrete legislative proposals.
The first imperative for Brussels is to close the innovation gap with powers like the United States and China, creating an environment that favors the growth of European startups, particularly in strategic sectors, which is currently slowed by difficult access to capital and complex regulation.
According to the head of the Confederation of Industry of the Czech Republic, Jan Rafaj, the European Commission has recently focused more on regulation than on supporting the real growth of European tech giants. "There is not a single European company among the top ten global giants," he said.
Bulgaria's aerospace and mobility companies can benefit, Bulgarian MEP Eva Maydell told the Bulgarian news website Club Z, giving examples like EnduroSat and Dronamics.
EnduroSat is one of the fastest-growing Bulgarian nanosatellite manufacturers and a leader in the country's space sector.
Dronamics is the first cargo drone airline with a license to operate in Europe.
The second major objective is the decarbonisation of the industry. Its main vector will be a plan for a clean industry that Brussels wants to unveil at the end of February. An action plan for "affordable energy" and an update of the European climate law are also to come.
Measures included in this chapter are: reviewing the climate tax on carbon dioxide imports, promoting a circular economy law, publishing a port strategy and continuing the dialogue initiated with the automotive industry.
Innovation in that sector fell behind mainly due to political decisions at EU level, said representatives from Slovenian politics, the European Investment Bank as well as economists and scientists at a recent panel organised by the European Parliament Liaison Office in Slovenia. They pointed out and stressed the need for measures like these to be adapted.
The third objective is, according to the Commission, to tackle the EU's strategic dependencies in a "global economic system fractured by geopolitical competition and trade tensions", in which it also faces unfair competition from powers that restrict access to their markets while flooding the European market with goods produced on the basis of massive state subsidies.
To finance the EU's competitiveness boost, Draghi recommended that investments should be partly financed by the European Union through joint borrowing modelled after its historic NextGenerationEU instrument designed for recovery from the Covid-19 pandemic.
Portuguese Prime Minister Luís Montenegro, for example, has been advocating an increase in the EU budget with more contributions from member states, a new joint debt issue, and even more private money for the EU to be able to invest in its priorities.
In a letter sent to von der Leyen last autumn, he asked for the EU Multiannual Financial Framework (MFF) - the EU's long-term budget - to be strengthened from 2028.
However, countries such as Germany and the Netherlands have traditionally been sceptical about taking on more joint debt.
Climate campaigners on the defensive.
As the EU shifts its focus to boosting the competitiveness of its 27 member states in the face of global challenges, climate and environmental campaigners remain vigilant of the compatibility of the new measures with the bloc's long-standing green ambitions.
According to Marcin Korolec, a former Polish environment minister, the Compass "falls short of clearly addressing the need for substantial investment in clean tech and cheaper energy solutions".
"We cannot overlook the pivotal role of targeted investments in achieving energy affordability and long-term competitiveness against China and the US," added Korolec, who now heads a green economy think tank.
According to Anna Stellinger, director of International and EU Affairs at the Confederation of Swedish Enterprise (Svenskt Näringsliv), a "dramatic" cut down of red tape would also benefit the green ambitions. She said "it is extremely important that we keep our ambitions and goals". She added: "Our companies have invested a lot (in that). But the rules have to be easier." According to the Confederation of Industry of the Czech Republic, European climate targets must take into account the different conditions in individual member states and the realistic availability of decarbonisation technologies.
According to the confederation's head, Jan Rafaj, not all sectors can be decarbonised as quickly as current European legislation requires.
Von der Leyen stressed that the EU will not change course but stick to its target of becoming climate-neutral by 2050. "I want to be very clear, the European Union stays the course of the Green Deal objectives, without any question," she said.
To enhance the competitiveness of the EU's net-zero industry, the Commission is expected to unveil its so-called Clean Industrial Deal - focused primarily on the transition to clean technologies such as renewable energies, as well as a plan to drastically reduce energy prices.
Just weeks ahead of the launch, the trade union industriAll Europe has called on its members to rally on Wednesday (February 5) in Brussels to jointly call for a strong plan to maintain and create good industrial jobs in Europe.
The European Commission is expected to unveil its Clean Industrial Deal on February 26.
(The content is based on news by agencies participating in the enr, in this case ANSA, BTA, CTK, dpa, EFE, Lusa, STA, TT).
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