French, Italian businesses urge incoming EU leaders to make ‘crucial decisions’ to boost competitiveness

5 months ago 18

Leading French and Italian business organisations stepped up pressure on incoming EU policymakers on Tuesday (4 June) to make crucial decisions to boost the bloc’s faltering competitiveness by cutting regulations and ramping up investment.

In a joint declaration issued just two days before the start of the European elections, the Mouvement des Entreprises de France (MEDEF) and Confindustria—France’s and Italy’s largest business associations—argued that “overregulation” and an insufficiently integrated single market are severely hampering the bloc’s economic growth.

“The European Parliament, to be elected on 9 June, along with the new European institutions, will have to make crucial decisions for the European Union,” the statement reads.

“Overregulation greatly weakens our companies,” the document reads. “Europe needs to […] bridge the gap between appropriate high-level policy decisions and implementation.”

The document also calls for an “investment shock” to finance the green and digital transitions, facilitated through greater EU-level public spending and deeper capital market integration.

On the former, they call on legislators to set out “more resources and financing instruments tailored to companies’ needs” in the next Multiannual Financial Framework – urging them to “preserve […] key financing criteria such as, for cohesion policy, the regional focus and the central role of socioeconomic partners.”

Notably, the emphasis on safeguarding the bloc’s long-standing priorities on its cohesion policy comes as opposition parties and local administrations in Italy warned against a growing centralisation of key funding decisions away from a broader variety of public stakeholders.

The two groups also call for a “powerful” European Sovereignty Fund (ESF) – an idea initially floated by European Commission President Ursula von der Leyen in 2022 – leveraging up to €500 billion in private investments to finance strategic for strategic technologies.

“Public procurement should support this by establishing a Buy European Act and build genuine European leadership,” they said, referring to recent proposals to strengthen the bloc’s focus on domestic products and services.

“Faced with the United States and China’s massive State subsidies, public purchasers should promote European technologies when equivalent in terms of price, quality, and performance,” the two associations said.

Finally, the groups call on policymakers to double down on the EU’s defence and security strategy and investments over the next decade, facilitating greater coordination among member states in defence spending, favouring cross-border economies of scale and working towards a common defence market.

The recommendations largely echo EU leaders’ own recent messaging as policymakers scramble to provide voters with a convincing platform to reverse Europe’s economic stagnation ahead of the EU elections.

However, not all European policymakers believe that cutting red tape is critical to boosting Europe’s competitiveness.

In a recent interview with Euractiv, European Commissioner for jobs and social rights Nicolas Schmit criticised the widespread narrative that Europe’s economic problems are primarily due to over-regulation.