FOR WHAT IT’S WORTH - N°16
Paloma's travel diary
"The game is simple: You lose, you die." – Squid Game
At the end of January, the European Commission unveiled its much-anticipated Competitiveness Compass, a strategic roadmap to revamp Europe's economic model and regain its competitive edge. Like contestants in Squid Game*, EU leaders now face high-stakes challenges—balancing innovation, decarbonization, and security while navigating political and economic pressures. In this edition, we explore how the Compass sets the stage for Europe’s industrial survival game and what it means for the future of the EU.
In the Corridors of Power
"You don’t trust people because they are trustworthy. You do it because you have nothing else to rely on." – Squid Game
1. The Competitiveness Compass
The Compass centres on three pillars: (i) closing Europe’s innovation gap with global powers like the US and China; (ii) furthering decarbonization while maintaining industrial competitiveness; and (iii) reducing dependencies to bolster economic security. Stéphane Séjourné, Vice-President for Prosperity and Industrial Strategy, has promised a "simplification shock" to reduce regulatory burdens without undermining environmental goals. However, its main purpose is much simpler than that, namely, to provide data-driven insights into the EU's economic performance and competitiveness, based on key indicators across various sectors.
2. Innovation vs. Bureaucracy
The EU aims to simplify corporate laws, insolvency processes, and tax systems to attract investment. A new legal framework for mid-sized companies will ease compliance for 30,000 firms. However, critics warn that deregulation could dilute sustainability standards. The odds to deregulate at all are uncertain – Europe's flagship project Societas Europaea, also designed to simplify the creation of PLCs across national borders, took no less than thirty years to implement (by 2001).
3. Decarbonization Meets Competitiveness
The Clean Industrial Deal, set for February 26, will focus on decarbonizing Europe’s top 100 CO2-emitting sites while supporting energy-intensive industries like steel and chemicals. Tailored action plans and green product labels aim to spur demand for low-carbon goods.
4. Reducing Dependencies
To secure critical raw materials and clean energy supplies, the EU plans joint procurement initiatives and streamlined mining permits within Europe. A European preference in public procurement will prioritize strategic sectors like renewable energy and advanced technologies.
What’s Up in the Global Economy?
"Hard work beats talent every time." – Squid Game
As Europe battles global competition, here are some key economic indicators shaping its strategy:
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United States: 124%
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European Union: 91%
These figures underscore why boosting productivity through innovation and decarbonization without having companies foot the bill is critical for Europe’s economic survival.
Looking at them, it seems a good idea to develop a tool to help EU policymakers, businesses, and stakeholders to take informed decisions by providing an evidence-based assessment of economic trends. And, as we are at it, the Compass is also meant to help the EU to identify best practices from other global economies, adapt its policies, and focus on strategic areas that can drive future economic growth and innovation.
Basics on the Regulatory
"Was all this legal? Absolutely fucking not." – Squid Game
The Competitiveness Compass introduces sweeping regulatory changes:
While these measures aim to cut red tape (and indeed to stop making a fool of ourselves), balancing simplification with sustainability remains a key challenge.
In My Humble Opinion...
"I’m not gonna die sober!" – Squid Game
The Competitiveness Compass is a bold attempt to steer Europe out of its economic stagnation. However, it risks becoming yet another bureaucratic exercise unless accompanied by decisive action. The EU must prioritize investments in education and skills to empower its citizens to thrive in this new industrial era.
We need to promote European champions in several sectors and markets. The short-sighted mantra of some EU officials (“European champions, not national champions”) completely misses the point and shows just how little faith they have in a Single Market that their predecessors allegedly completed under President Jacques Delors in 1992.
Every freshman learns about SMART objectives. Harmonising labour law has been the ILO’s brief for over a hundred years, but just how SMART are targets like harmonising taxation and insolvency laws? What exactly should suddenly persuade Member States to drop decades-old opposition to harmonising certain subjects? Hardly the Compass, whose main gist is to offers a comprehensive overview of the EU's economic strengths and challenges by examining factors such as research and development, labour market performance, infrastructure quality, and regulatory frameworks, it – not to effectively do anything about such factors.
Let’s not waste all our energy on celebrating this document while merrily navel-gazing but start working on bold effective moves immediately.
*"In this game, everyone is equal at the start. But some are more equal than others by the end."
Squid Game serves as a fitting metaphor for today’s EU challenges—a high-stakes competition where only those who adapt survive. The Competitiveness Compass offers a chance for Europe to rewrite its story of industrial decline into one of resilience and innovation.
This edition ties together the Squid Game theme with the EU's Competitiveness Compass announcement while providing data-driven insights into the challenges ahead.
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