Home Europe Ursula von der Leyen’s plan to revitalize the European economy unveiled

Ursula von der Leyen’s plan to revitalize the European economy unveiled

by editor

The European Commission’s new compass for competitiveness outlines a comprehensive “growth strategy” aimed at guiding policymakers over the next five years. This extensive 27-page document is packed with recommendations designed to rejuvenate the European Union’s economy.

Reducing bureaucracy for businesses

President Ursula von der Leyen emphasized the urgent feedback from European businesses regarding the “excessive complexity” in EU regulations, primarily stemming from new climate-related laws. To tackle this, she has pledged to simplify legislation concerning sustainable finance, due diligence, and taxonomy through an “omnibus package.” This initiative is projected to save companies an estimated €37 billion annually by 2029.

However, this push for deregulation has raised concerns among climate advocates, who fear that prioritizing innovation and growth could undermine environmental protections. Critics point to proposals such as allowing e-fuels to keep combustion engine vehicles operational and the planned simplification of the carbon border tax as potential risks.

Commitment to climate goals

Despite these concerns, von der Leyen reassured that the EU remains firmly committed to its Green Deal objectives and will not alter its climate targets. The Commission has even reorganized parts of the strategy document to highlight the importance of innovation and decarbonization. The transition of traditional industries and the development of climate-friendly technologies are central to this competitiveness compass. More specific measures are anticipated with the upcoming Clean Industrial Deal, scheduled for presentation on February 26.

Additionally, the Commission will focus on resource efficiency and promoting the circular use of materials, signaling a strategic importance for niche sustainability topics like recycling and eco-design. While the Circular Economy Act is not expected until 2026, the current compass reaffirms the Commission’s plans for the last quarter of this year.

“We must really focus more on breakthrough innovation and disruptive technologies,” von der Leyen stated.

In response to automotive industry demands for leniency regarding fines for failing to meet new emissions targets, the strategy document proposes “immediate solutions” to preserve the industry’s investment capacity, including exploring potential flexibilities. This will be negotiated in a strategic dialogue with the automotive sector starting this Thursday, amid concerns that non-intervention could result in €15 billion in fines for manufacturers.

Addressing energy costs and fostering innovation

European businesses currently face significantly higher electricity and gas prices compared to their American and Chinese counterparts, a situation von der Leyen aims to address. The plan includes investing in enhanced network infrastructures and adjusting how contracts are formed and charges applied.

Although funding remains limited, the ambition to improve energy affordability has garnered support from energy and industry lobbies, with critical details expected in an action plan for affordable energy due by the end of February.

Moreover, von der Leyen is keen to increase access to private financing for companies, pushing towards the establishment of a capital markets union, now termed the “savings and investment union.” This involves expanding EU investment programs and leveraging the European Investment Bank for more public guarantees and loans.

Strengthening the tech landscape

With a keen eye on global competition, particularly in artificial intelligence, von der Leyen is committed to developing a comprehensive strategy for startups and scale-ups alongside a robust AI framework for Europe. The document notes that the EU aims to enhance computational power, cloud infrastructure, and data access, essential for competing in the rapidly advancing tech landscape.

Additionally, the Commission plans to address the current low adoption rate of AI among businesses—only 13% utilize this technology—by rolling out an AI application strategy later this year.

To facilitate innovation, von der Leyen has promised action plans across various tech sectors, including advanced materials, quantum technologies, biotechnology, robotics, and space technologies, positioning these as crucial for future markets.

As the EU gears up for these changes, von der Leyen’s vision revolves around fostering a competitive, sustainable, and innovative European economy that addresses the challenges of today’s global landscape while keeping a firm commitment to climate goals.

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