TAE on the debate regarding ‘The Future of the EU and Competitiveness – A Strategic Outlook’

Background

The debate on Europe’s future, particularly with regard to resilience and enhanced competitiveness, has inevitably gained momentum. Among the triggers were economic pressure from the US under the new American administration and China’s aggressive trade policy, which is putting European companies under immense competitive pressure. The ongoing war in Ukraine, geopolitical tensions, the energy crisis, external factors such as the COVID-19 pandemic, uncertain supply chains and rapid technological change have laid bare the EU’s structural weaknesses. Added to this are further major challenges such as tackling the consequences of climate change, demographic trends, improving internal and external security, and migration and refugee flows from third countries.

Competitiveness is also suffering from internal problems such as excessive EU bureaucracy. According to EUR-Lex, 14,065 primary and amending legislative acts were adopted in the last parliamentary term (2019–2024) alone. This year, the figure has already risen to 907! However important – and in some cases justified – regulations may be, they generally result in additional burdens for businesses and, ultimately, for consumers too. Furthermore, when regulations apply only in Europe, competitiveness invariably suffers, particularly that of small and medium-sized enterprises (SMEs).

The fact is that Europe is becoming less attractive as a business location. To avoid falling behind the major players, Europe must reposition itself and strengthen its standing. The new European Commission has recognised this and intends to address the issue proactively. Whilst discussions, plans and objectives are welcome, it must be clear to all stakeholders that we need to act swiftly. However, concrete implementation – and, above all, pace – are still lacking.

The EU is at a turning point. Anyone wishing to remain competitive and defend their position needs the courage to simplify and make forward-looking investments. An agenda for strategic autonomy is required, including an SME-friendly single market.

What is needed are substantial and sustainable EU solutions that lay the foundations for growth and prosperity for all. Solutions that are efficient and – when public funds are used – generate maximum benefit at minimum cost. One could also say: it is time for a renaissance of values in the spirit of the EU’s founding fathers, including the principle of subsidiarity and a clear commitment to the market economy. More Europe where necessary, and less Europe where possible.

Below are some suggestions as to what the discussion should focus on from the taxpayers’ perspective.

Download the TAE papers on ‘The Future of the EU and Competitiveness’

Brussels, 4 June 2025