by Stefano Mallia, EESC Employers' Group president

On 29 January, the European Commission adopted the Competitiveness Compass, a critical and timely step to reignite Europe’s economic engine that will chart the EU’s course for the next five years.

EU employers have long advocated for an overarching competitiveness agenda, and we welcome the three pillars of the compass: closing the innovation and productivity gap, combining decarbonisation with competitiveness, and reducing dependencies to secure supply chains. These are key to ensuring that Europe can compete globally, attract and retain talent and foster innovation.

However, the ultimate success of the compass hinges on the development of concrete measures and their timely implementation. Key initiatives such as the Omnibus Simplification package, the Clean Industrial Deal and the horizontal strategy to deepen the single market will play a decisive role. Nonetheless, rebranded strategies and catchy titles alone cannot shield us from the challenges ahead.

For example, simplifying the regulatory framework is the first and most urgent step. Reducing burdensome bureaucracy and promoting speed and flexibility are essential. For too long, EU businesses have struggled with overcomplexity and sluggish decision-making. We also need meaningful implementation of the competitiveness check, so that new legislative and regulatory measures support, rather than hinder, business growth.

The compass rightly focuses on fostering innovation through a robust Capital Markets Union and addressing structural barriers to unlock Europe's potential in deep tech, clean energy and advanced manufacturing, while creating a fertile ecosystem for start-ups and scale-ups.

The never-completed Capital Markets Union is indeed a reminder that we cannot afford any delays. While the compass promotes better coordination of national government investments, it lacks a clear plan on other common sources of funding. But the world will not wait for us.

The race is on and now is the time to go into top gear. Unlocking competitiveness is not just an economic imperative, it is the key to shared prosperity for all. European businesses are and will remain part of the solution.