Dear friends,
Who’s in the mood for a nice competition? Well clearly not the EU Commission. This week, they presented their work programme for 2025 in the European Parliament. Doesn’t seem like the EU really wants to stand up to the big, bad bullies out there. While innovative ideas and services are flooding Europe from the US and China, we chose to go slow. We protect old companies and business models and wrap start-ups in a lot of red tape. Here’s why I think this is a mistake.
GET RID OF PAPERWORK
If I look at the Commission work programme from the perspective of a founder, I’m disappointed. What I would expect is dedication to simplify and harmonize the jumble of legal rules across the continent. It’s incredibly hard to comply with all the regulations when you want to found a company and be active in our single market. It’s slow, requires a lot of paperwork and you have to navigate the depths of bureaucracy. Ever wonder why Europe has so few innovative players with significant market value? Because many of them simply give up.
Now don’t get me wrong: It’s great that the EU has a solid set of rules for companies rather than just letting anyone freestyle. But reducing bureaucracy doesn’t mean we have to compromise on fundamental rights or climate ambitions. Quite the opposite: If we give innovators the air to breathe, they can grow and create jobs in the green economy, making Europe competitive. But not if we’re constantly changing the framework in which they operate. It’s good that the Commission now wants to get rid of at least some rules. I just fear it’s not enough yet.
FUND THE FOUNDERS
Second, founders need money. When you want to make your ideas grow, capital is key. The Commission believes this can be achieved through private capital, and it’s good that they want to help unlock it. But that’s not enough. The programme lacks plans to unlock venture capital, which would really help start-ups and scale-ups.
And if we really want to transform our economy, we will also need public investment. In Europe, we invest only a fraction of what other global players shell out. And funds are often distributed nationally or even regionally, making it even harder for ambitious European ideas to kick off. What we need is a permanent fiscal capacity in the EU. So we can rebuild, innovate and connect our infrastructure.
CALL FOR TALENTS
Then, there’s talent. Good ideas need great minds. It seems like common sense, but the Commission doesn’t have a plan how to unlock talent. There is huge potential within Europe: In nearly all of the member states, female workforce is still lagging behind. It’s also ridiculously hard to move between member states – think of health insurance, taxation and remote work. We’re taxed wherever we live in the EU, and we have to prove this to the tax authorities every year, meticulously tracking the days we have spent in member state A or B. Really? No wonder large companies take a detour and use US employers to employ EU staff. It’s a disgrace.
We also know that Europe is already short of skilled workers, and this is going to become worse with every year, given that our population is ageing and shrinking. So what’s the Commission’s plan to attract talent from abroad? There’s a great big hole gaping there. We will need labour migration if we want to be prosperous. Ironically Trump is even helping Europe here. The more he scares away talented workers, the more Europe can take advantage. Why not put up a giant billboard in Silicon Valley or San Francisco: Come to the EU! You’re welcome here, we have excellent schools, quality healthcare and you’ll be a full part of our society?
LET’S RECLAIM THE FUTURE
There is reason for hope. Europe can take a big step if it really wants. We have seen that in Paris this week, where a bold and dedicated AI strategy was carved out. And the Commission has agreed to scrape some unnecessary provisions to make the lives of founders easier. This is how it should be! A clear vision, an ambitious goal and, at least in this case, sufficient funding from both France and the EU.
Innovation doesn’t just happen like that. If we want to be competitive, we have to create the environment for good ideas. I hope the Commission will eventually muster the courage to try something new. A progressive, optimistic and confident mindset is what we need now. Let’s make Europe fit for the future!
Yours
Damian
