The EU needs to radically ramp up efforts to slash red tape and unify its single market if it wants to compete with China and the United States, France’s Europe minister told POLITICO.
Benjamin Haddad applauded efforts by the European Commission to start streamlining rules in fields such as finance and sustainability as part of a so-called Omnibus Simplification Package, which was launched last month.
But the European Union now needs to pick up the pace in revamping rules on corporate sustainability, due diligence, finance and defense, among other areas — taking much bolder steps than it has so far.
“Now I think we need to accelerate. The Omnibus needs to become a TGV,” he said, referring to France’s Train à Grande Vitesse high-speed rail lines. “When the Commission wants to go fast, it can do so … There is a window to act now.”
Asked whether the Omnibus package should be followed by further efforts to slash red tape he said: “Of course. We’ll need to address many other areas, including defense. It is almost one year since the European Parliament election. And now we are starting to talk about the first [simplification] bills. We have a window to act and we need to take it.”
Haddad’s comments come in the wake of a joint push on Monday by the leaders of both France and Germany to abolish a law on ethical supply chains, amid a pro-business anti-green effort designed to bolster Europe’s competitiveness.
The Europe minister said several EU countries, in addition to France and Germany, want to go beyond the Commission’s proposed streamlining and abolish the Corporate Sustainability Due Diligence Directive.
“In trilogue, at the Council, there will be many states that want to go further than the Commission’s proposals, notably on due diligence,” he said.
Haddad also took aim at the EU’s 2040 climate targets and said Basel III — an international banking regulation designed to improve bank capital and liquidity — should be further delayed after the EU postponed implementing components of the regulation until the start of 2026.
“I hear about other projects from the Commission, like creating new environmental benchmarks for 2040,” he said. “This is not the time to add complexity, but to see how we can make sure our companies are competitive on the international stage.”
“At a basic level, we can’t allow decarbonization to reinforce Chinese and American industry. So let’s have a pause on further norms and let’s accompany our companies, protect them.”
While hacking away at regulation, the EU also needs to overcome decades of inertia and start to unify its fragmented single market so EU companies can draw on deeper stores of capital and grow large enough to compete with American and Chinese rivals, Haddad said.
He emphasized the need to push ahead with the formation of a so-called capital markets union — an idea that has failed to gain critical mass among EU countries despite years of advocacy by Paris and Berlin.
“There will be proposals in coming months which go in this direction on the capital markets union, whether it’s on securitization or on a European savings account or a single supervisory authority,” he said. “Now is the time to go ahead with these things.”
Another item on Haddad’s wish list: a common legal regimen for companies across the bloc. Currently, companies wishing to expand beyond their national borders need to grapple with 27 different legal systems — a problem that former Italian Prime Minister Enrico Letta has vowed to solve by creating a 28th, European regime.
“I’d go even further,” Haddad said. “I know the Commission is working on a 28th regime of corporate law. We’re not going to harmonize everything overnight. But let’s add a 28th regime for companies that can choose between a national or European regime if they want to develop on a European scale.”
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