By AFP -Agence France Presse
Faced with Trump and China, EU unveils pro-business roadmap
By Daniel ARONSSOHN
Brussels, Belgium (AFP)
The European Union on Wednesday unveiled a long-awaited plan to reshape Europe's economic model, marking a shift towards a more business-friendly Brussels after five years of heavy focus on green goals.
With US President Donald Trump promising tariffs and a massive artificial intelligence push, and China growing in key industrial and digital sectors, the 27-nation bloc is under pressure to make life easier for companies driving their growth.
“We need to reignite Europe's innovation engine,” said EU chief Ursula von der Leyen at a press conference to present the ‘competitiveness compass’ - the first major initiative of her second term.
The European Commission's recent priorities on climate change and business ethics have left many companies complaining about over-regulation, which adds to high energy costs and poor investment.
Answering this call, the EU hopes to get back into the race by turning the recommendations made last year by former Italian leaders Enrico Letta and Mario Draghi into a tangible action plan.
But von der Leyen promised that the bloc remains committed to achieving carbon neutrality within 25 years to reduce dangerous climate change - while cutting red tape.
“The targets we have by 2050 are unshakeable,” she said, although Europe needs to be ‘flexible’ about how it achieves them.
In particular, the draft says that “possible flexibilities” should be considered for Europe's struggling carmakers, who will face hefty fines for emissions in 2025.
- Simplification shock
Under the plan, dozens of laws will be overhauled, with rules on environmental and human rights supply chain standards, corporate sustainability, and chemical safety all facing a cut.
The “simplification shock”, as announced by the commission's vice-president Stephane Sejourne, has set off alarm bells among environmentalists.
“Under the pretext of 'simplification', this initiative will dismantle essential safeguards for European citizens, the environment, and the climate,” warned Kim Claes, from Friends of the Earth Europe.
But Markus Beyrer, director general of EU lobby group BusinessEurope, welcomed the plan as “a clear signal that the EU is committed to strengthening the European economy”.
A new category of medium-sized companies will be created to reduce the regulatory burden for thousands of companies, according to the text.
A European legal regime, distinct from the national jurisdictions of the 27 member states, will be created to allow innovative companies to benefit from a single, harmonized set of rules on insolvency, labor law, and taxation.
- Reducing energy costs
Europe is suffering from energy costs that are much higher than those of its international competitors after the war in Ukraine cut off the supply of cheap Russian gas.
Von der Leyen told a meeting of the world's elite in Davos last week that the bloc must “continue to diversify our energy supplies” and expand clean energy sources, including nuclear - once taboo in Brussels.
The “compass” plan also recommends facilitating long-term power purchase agreements and increasing investment in the energy grid.
- Encouraging the green industry
The “simplified and targeted aid” will encourage industrial decarbonization, and Sejourne expects the priority to be the greening of the “top 100 CO2 emitting facilities”, which alone account for more than half of Europe's industrial emissions.
The plan also envisages the creation of labels to stimulate demand for low-carbon products, such as “green” steel, which Brussels is keen on but which is in low demand due to its prohibitive costs.
Specific plans will be drawn up for problematic sectors such as the chemical, steel, and automotive industries.
- Mines and mergers - The EU plan
The EU plan also requires the bloc's competition watchdog to take into account the huge investment needs of technology companies when assessing mergers in “strategic sectors”.
Currently, the focus is on the potential impact on prices, which prevents the creation of European giants.
To reduce dependence on China and other countries for rare earths and raw materials, Sejourne wants more material to be extracted in Europe.
The commissioner said he has already received 170 exploration or mining research projects - which often face local opposition over environmental impacts - and promised to “facilitate” the issuing of licenses.
The compass foresees the creation of a platform for the “joint purchase” of essential raw materials and the development of international partnerships to strengthen supply lines for green technologies, such as solar and wind energy, chips, and pharmaceutical ingredients.
A “European preference in public procurement” for essential sectors and technologies is also mentioned.
- Building the savings union
More than three decades after its launch, the EU's single market is still fragmented in sectors such as telecommunications, energy, and defense, where different national rules hamper competitiveness.
The “removal of remaining barriers” is among the priorities cited in the draft compass.
The unification of European capital markets - something that has long been stalled by competing national interests - is at the top of the list.
Although Europe has a single currency, its start-ups are still unable to match the gigantic fundraising campaigns of their American competitors.
To solve this problem, von der Leyen promised at Davos to create a “European savings and investment union”.
aro-ub-ec/rlp
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