“The world is not waiting for us,” Ursula von der Leyen, the European Commission president told journalists on 29 January as she introduced new proposals to improve the competitive position of European industry. The Commission president outlined three goals for the coming year. They include providing incentives for new companies, especially in artificial intelligence; advancing clean energy; and expanding commercial partnerships with companies and countries across the globe. The measures for companies include incentives for generating risk capital.
The proposals are a follow-up to the Draghi report on competitiveness which was issued in September 2024, and prepared by Mario Draghi, the former president of the European Central Bank. In the report, Mr Draghi said Europe is lagging behind the US in the development of new digital technologies which are driving up productivity in America and leaving the Union behind. In her presentation on Wednesday, President von der Leyen said the Commission will propose creating public-private AI gigafactories and apply the technologies across sectors for advanced materials, quantum biotech, robotics and space technologies.
On the subject of finance and regulation, she said there will be a proposal to create a 28th legal regime. The EU currently has 27 member states whose national rules often overlap, or in some instances, are contradictory. “A proposal for a 28th legal regime will simplify applicable rules, including relevant aspects of corporate law, insolvency, labour and tax law, and reduce the costs of failure. This will make it possible for innovative companies to benefit from one single set of rules wherever they invest and operate in the single market,” she said.
Improving growth and competitiveness will also require a vibrant capital market, according to Mr Draghi and others. President von der Leyen underscored this need saying there is ample private capital but this will need to be mobilised and coupled with public funds to spur growth. According to the Commission and the European Central Bank, between €750 and €800 billion would need to be mobilised every year. This would require investment to rise to 27% of the EU GDP, from 22% at present.
Noting that the EU lacks an efficient capital market, President von der Leyen said the Commission will propose new savings and investment products and provide incentives for risk capital across the EU. “A refocused EU budget will streamline access to EU funds in line with EU priorities,” she said.
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