The European Commission has announced plans to cut red tape on businesses, loosen state aid rules and give preference to European bidders on certain public contracts, in an effort to make Europe more economically competitive.
The commission, the EU’s executive arm, published a roadmap of reforms and policies on Wednesday that it hoped would jump-start the union’s economy and prevent it falling further behind China and the United States.
Ursula von der Leyen, president of the commission, said there would be a big push to reduce the amount of paperwork companies had to fill in to comply with various EU rules and regulations.
“We have a very clear signal from the European business sector that there is too much complexity. Administrative procedures are too cumbersome ... We have to cut red tape,” she told a press conference in Brussels.
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Dr von der Leyen said this did not mean the commission was rolling back on the ambitious “green deal” reforms from her first term in the powerful EU role. Europe was “staying the course” on its plans to become climate neutral by 2050, she said.
The days of European manufacturers being able to rely on cheap labour from China and cheap energy from Russia were gone, Dr von der Leyen said.
The EU needed to make up ground in the global “race” to lead the way on artificial intelligence (AI), so more support would be given to European companies developing the technology, she said.
Companies that were “first movers” in investing in clean technology and renewables would be rewarded by getting preference when bidding on certain public contracts, she said. They will also benefit from a simplified state aid regime, giving governments more leeway to offer companies subsidies to locate business in their country.
The state aid proposals are likely to raise eyebrows in Dublin, where the Government has traditionally opposed EU states being allowed to offer generous subsidies to companies, for fear Ireland would lose out to those with deeper pockets such as France and Germany.
A commission source said looser state aid rules were likely to apply to subsidies offered to companies in select fields the EU wanted to see grow, such as the renewable energy sector.
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The commission’s competitive roadmap committed to drive through long-stalled capital market reforms, to make it easier for private investment to move between the 27 member states.
A recast “Savings and Investments Union” would harmonise laws across the bloc and lower hurdles facing start-ups and firms trying to raise private capital across borders.
EU officials hope these reforms will make it more attractive for people to invest money they have sitting in savings accounts, potentially freeing up billions of euro in capital that European businesses could tap.
Stéphane Séjourné, EU industry commissioner, said Europe needed to get to a position where it was opening more factories than were closing.
The French commissioner said the EU was leaning in at a time when others were “stepping back from their commitments”, a likely reference to US president Donald Trump.
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