Termed the the Competitiveness Compass, the European Commission has outlined its plans to simplify regulations in a move to boost competitiveness against the US and China.
Promising the best of both worlds, on January 29 the commission said it would meet its Green Deal goals while boosting productivity, cut away red tape and clarify regulations.
It said the Competitiveness Compass was “the first major initiative of this mandate providing a strategic and clear framework to steer the Commission’s work”.
The EC said it wanted Europe to be the primary location for the development of future technologies, services and clean products and where they were manufactured and marketed, while also being the first continent to become “climate neutral”.
Ursula von der Leyen, President of the European Commission, said: “The Competitiveness Compass transforms the excellent recommendations of the Draghi report into a roadmap.
“So now we have a plan. We have the political will. What matters is speed and unity. The world is not waiting for us. All member states agree on this. So, let’s turn this consensus into action.”
Stéphane Séjourné, the EC Executive Vice-President for Prosperity and Industrial Strategy said: “With the Compass, the Commission presents its economic doctrine for the next five years. This doctrine is simple and can be summed up in one key word: competitiveness.”
He added there should be a “shock of simplification”.
It is time to restart Europe’s innovation engine.
We have the Compass.
We have the political will.
Now, what matters is speed and unity.
Because the world is not waiting for us ↓ https://t.co/4iollrSWxi
— Ursula von der Leyen (@vonderleyen) January 29, 2025
Von der Leyen stressed that the commission would maintain its targets to cut net greenhouse gas emissions by 55 per cent by 2030, and have them at zero by 2050.
“We stay the course. The goals are cast in stone,” she said. “The goals stay, the objective stays, but we want to reach it better and faster. And for that, we have to reduce complexity.”
According to the EC, there were three core areas for action: Technological innovation, decarbonisation with the upcoming Clean Industrial Deal and focusing on affordable energy and security.
In addition, the body identified five “horizontal enablers”, which it said were essential to underpin competitiveness across all sectors.
They included simplification, which would be tackled with an “omnibus proposal”, lowering barriers to the single market, modernising governance frameworks and removing internal barriers.
The commission said it would propose a European Savings and Investments Union, offering new financial products, boosting risk capital and making investments flow smoothly across the European Union.
A revamped EU budget should also make it easier to access funding aligned with EU priorities,, it said.
The EC also stated it wanted to promote skills and “lifelong learning” in addition to better co-ordination of relevant policies at EU and national level.
We want technologies and products to be created, manufactured and marketed in Europe.
And we must act now.
Our new Competitiveness Compass is the plan for Europe’s productivity and growth. ↓🧵#madeinEurope pic.twitter.com/e4vqzVXDIA
— European Commission (@EU_Commission) January 29, 2025
With the Competitiveness Compass, the body seemed to observers to have shifted somewhat from the environmental focus of previous legislature, centring on industry rather than climate.
The EU has also been rattled by US President Donald Trump threatening to slap tariffs on European products and China’s continuing industrial advancement. As things stand, the EU is lagging behind its competitors.
Using recommendations from reports by former Italian prime ministers Mario Draghi and Enrico Letta, who have been highly critical of the EU’s performance in the last couple of decades, Brussels is apparently hoping to reverse its current woes.
Businesses have struggling with high energy costs and low investments, a product, according to many, of misguided green policies.
To address this, the EC promised to trim down many of its environmental, social and governance inspired regulations.
Some companies have been required to report on how their global suppliers respected human rights, provided acceptable labour conditions and the environmental impact of those operations elsewhere.
Separately, in the search for rare-earth materials, the commission said it would allow more mining projects and “facilitate” the granting of relevant permits, something of a reversal compared to the green policies that had reportedly stifled such projects previously.
It added that a platform for jointly purchasing critical raw materials and forming global partnerships would be formed, designed to secure supply chains for green tech, semiconductors and pharmaceuticals.
Next to the formation of a new status for mid-sized companies with less regulation, a single legal framework separate from national laws to give innovative companies uniform rules on insolvency, labour law and taxation, would also be created.
Instead of targeting entire industries with emission directives, the EC said it would prioritise the 100 most emitting sites accounting for more then half of Europe’s industrial emissions.
Low carbon products, such as “green steel”, would still be supported, it added, despite little success in that sector so far.
