The European Central Bank published an ECB Blog post co-authored by President Christine Lagarde and European Commission President Ursula von der Leyen arguing that EU competitiveness is at risk and that Europe needs “profound change” to lift growth and productivity. The post points to the European Commission’s newly presented Competitiveness Compass as the policy vehicle for lowering internal barriers, improving access to finance and compute, reducing regulatory frictions and bringing down energy costs, while positioning the ECB’s contribution around keeping Europe at the forefront of digital payment technologies, including through the digital euro project. The authors frame the agenda around three priorities: making it easier for innovative firms to scale across the Single Market, making Europe a better place to invest by addressing permitting, reporting and fragmented enforcement of digital rules, and making doing business cheaper by tackling energy costs through investment in grids and storage and “smarter market design” to manage intermittency and curtailment. Supporting data points cited include households saving around EUR 1.3 trillion annually, only one-third of European university patents being commercialised, two out of three EU companies identifying regulation as a key obstacle to investment, and just 14% of companies using artificial intelligence. Next steps highlighted include planned Commission proposals for a “28th regime” to provide a single EU legal framework for aspects of corporate law, insolvency, labour law and taxation for innovative companies, and a plan for a Savings and Investments Union to improve access to risk capital. The post also flags company access to the EU supercomputing network and an “unprecedented simplification effort” from March 2025, including simplification of legislation on sustainable finance reporting and due diligence, alongside measures intended to reduce energy prices by integrating markets, increasing contracted energy and reducing taxes.
European Central Bank 2025-02-01
European Central Bank blog backs the European Commission Competitiveness Compass and highlights the digital euro as part of its contribution
The European Central Bank and European Commission stress the need for changes to boost EU competitiveness by reducing internal barriers and regulatory frictions. The Competitiveness Compass is a key tool, prioritizing scaling innovative firms, improving investment conditions, and reducing business costs through energy investments. Upcoming proposals include a "28th regime" for a unified legal framework and a Savings and Investments Union to enhance access to risk capital.