German Chancellor Friedrich Merz has said the European Union has hobbled its own competitiveness through excessive regulation and bureaucracy.
Central to his message at the World Economic Forum in Davos today was a critique of the EU’s regulatory burden, which he said has crippled growth and innovation.
In a special address to global leaders, Merz called for urgent reforms, including what he termed an “emergency brake” on bureaucracy to restore Europe’s economic edge amid a rapidly shifting global order.
“Both Germany and Europe have wasted incredible potential for growth in recent years by dragging its feet on reforms and unnecessarily and excessively curtailing entrepreneurial freedoms and personal responsibility. We are going to change that now,” he said.
“Security and predictability take precedent over excessive regulation and misplaced perfection.
“We must reduce bureaucracy substantially in Europe. The single market was once created to form the most competitive economic area in the world, but instead we have become the world-champion of over-regulation. That has to end,” he said.
Merz proposed concrete measures to reverse the trend, including an emergency brake for bureaucracy – a mechanism to halt or pause new regulatory initiatives – and a principle of discontinuity for legislative work, preventing automatic renewal of outdated rules.
He also advocated for a modernised EU budget that places competitiveness at its core.
The proposals align with ongoing efforts by Merz and allies, including Italian Prime Minister Giorgia Meloni, to push for deregulation.
Merz emphasised that “Europe has understood the message, Germany has understood”.
The Chancellor’s remarks come as the EU and Germany grapple with sluggish growth, high energy costs and intensifying competition from the US and China.
The EU’s promised “cutting of red tape” and simplification of General Data Protection Regulation (GDPR) for business actually only offered “cosmetic fixes” and “minor change”, said a major tech organisation. https://t.co/m43U5BncJj
— Brussels Signal (@brusselssignal) May 22, 2025
Merz’s address also touched on transatlantic relations, urging Europeans not to prematurely abandon the US partnership despite recent tensions, including over Greenland and trade threats.
He welcomed shifts in rhetoric from Washington while stressing the need for Europe to assert itself as a strong, unified actor.
Merz described the current international landscape as a “new era of great-power politics” built on power, strength and, when necessary, force.
He argued that Europe must respond by bolstering its security, competitiveness and unity – three pillars he identified as essential for navigating the upheaval.
“The old world order is unravelling at breathtaking pace,” Merz told delegates.
“We have entered an era where only power counts, a dangerous place.”
Yet he insisted Europe is not helpless: “We do not have to accept this new reality as fate. We are not at the mercy of this new world order.”
The German university town of Tübingen in Baden-Wurttemberg is facing investigation for a potential violation of the European Union’s General Data Protection Regulation (GDPR) after it publicly congratulated a citizen for his birthday. https://t.co/L784oROwiC
— Brussels Signal (@brusselssignal) December 5, 2025
