The competitiveness check should apply to any EU policy and law-making process, the European Economic and Social Committee (EESC) argues in a new opinion, where it also makes the case for an EU "competitiveness agenda".
In the report, adopted at the December plenary, the EESC argues that the impact of EU policies and regulations on the competitiveness of EU businesses needs to be assessed much more comprehensively and systematically than is currently the case.
A competitiveness check should cover legislation, fiscal measures, strategies, programmes, international agreements, even the European semester. It should look at their impact on businesses, employment, working conditions and compliance costs. It should consider how they can affect businesses of different sectors, sizes and business models. It should encompass both short- and long-term impacts.
Europe is becoming less competitive due to both long and short-term developments. Its share of the world's GDP has been falling for quite some time and could shrink to less than 10% by 2050, with 85% of global GDP growth expected to come from outside the EU in the next couple of years. The short-term outlook is no rosier, with the ongoing aftermath of COVID-19, the war in Ukraine, rising inflation, soaring energy prices and dependence on key foreign imports. Add to that the green and digital transitions and you get a fairly good idea of the huge challenges EU businesses are facing.
How do we ensure that competitiveness, and businesses in general, are given a more prominent role in EU decision-making? The EESC proposes a three-pronged approach.
First, at technical level, the EESC suggests beefing up the European Commission's impact assessment of proposed regulations and policies by making the competitiveness check mandatory and much more extensive.
The European Commission already has to carry out impact assessments where the effects of an initiative on competitiveness and sector competitiveness are taken into account. That's thanks to the Better Regulation Guidelines and Toolbox, and we appreciate it," said Christian Ardhe, rapporteur for the EESC opinion. "However, we also see a need for improvement, especially with respect to implementation and enforcement.
Indeed, the 2021 report of the Regulatory Scrutiny Board, a body that checks the quality of the European Commission's impact assessments, showed that one of the Board's most frequent criticisms of submitted impact assessments was that they failed to analyse the impact of initiatives specifically on competitiveness.
Second, at political level, competitiveness should be given proper weight when shaping new initiatives, which should be assessed on how they contribute to and support competitiveness for business and, in the long run, competitiveness for the whole of Europe.
Thirdly, the Committee calls for a specific competitiveness agenda with the long-term goal of enhancing the EU's competitiveness. In the Committee's view, this agenda should focus on:
- developing the single market and reducing market barriers,
- enhancing investment and access to finance,
- facilitating foreign trade and external cooperation,
- promoting innovation, high-level talent and research excellence, and enhancing skills through education, vocational training and lifelong learning,
- making labour markets more inclusive and improving working conditions, and
- speeding up permit procedures.
"With this opinion, we really want to come back to the ways in which competitiveness is monitored, and take into account the complexities involved in this area," said Giuseppe Guerini, co-rapporteur for the opinion. "Today, competitiveness is no longer something that affects single businesses or companies – it really is about ecosystems. So, we need to take a more complex approach when we look at it."
The opinion was drawn up in response to a request from the Czech presidency of the Council of the EU.
Commission President Ursula von der Leyen announced the Commission's intention to bring in a competitiveness check for new EU initiatives during a speech to the European Parliament last October.
Read the EESC opinion A competitiveness check to build a stronger and more resilient EU economy