Last week, as the European Business Summit took place, the EU reached a significant milestone: after 26 hearings and tough political negotiations, all Commissioner nominees were approved, clearing the way for the new College of Commissioners to take office on 1 December. The new College faces an uphill challenge amid ongoing economic, security and geopolitical instability. As outlined in the Draghi and Letta reports and echoed during lively exchanges at the two-day Summit, Europe’s economic future hinges on its ability to simplify, reform, and innovate.
One word echoed most prominently throughout the Summit’s sessions: simplification. From regulations to implementation, it became clear that Europe’s competitiveness relies on creating an environment that is more efficient, predictable, and attractive to investment.
Economic Reality
On the summit’s first day, Olivier Guersent, Director General, DG COMP European Commission, presented a stark reminder: the EU must complete the EU’s Capital Markets Union (CMU). Without this, Europe risks falling further behind more integrated economies like the US, where capital flows are far more efficient. This reinforces what we saw in the Draghi Report, which stressed that a more competitive Single Market is needed for Europe to respond to the changing global economic climate. The cost of inaction, Guersent argued, is far higher here than in the US.
Sven Smit of McKinsey, Chair, McKinsey Global Institute, painted a worrying picture, revealing that European businesses lag significantly behind their US counterparts in profitability. Despite excelling in luxury goods, Europe struggles in technology and innovation—two sectors increasingly vital for long-term economic growth. High energy costs have placed Europe at a distinct disadvantage. Without reform, Europe risks seeing capital continue to flow to the US and Asia, reinforcing the competitiveness gap.
The Green Transition
Day two of the Summit featured an engaging discussion on Europe’s green transition. The discussion featuring representatives from the European Institutions and industry highlighted the urgent need for long-term investments, particularly in renewable energy infrastructure in Europe and regions like North Africa. This aligns closely with the Draghi Report, which highlighted the importance of developing Europe’s green energy infrastructure while looking to reduce its reliance on external suppliers. Industry representatives noted the need for predictable regulatory frameworks and simplified processes to attract private investment and innovation, particularly in green technologies. Simplifying regulations in green financing and public procurement were also highlighted.
AI
AI inevitably featured as a hot topic at the Summit, not just for its potential to transform industries but for its integral role in advancing the green transition. The conversations around AI were not without concern, where panellists highlighted its potential for misuse and misinformation.
The Road Ahead
As the new Commissioners prepare to take office, speakers highlighted the need to bridge the gap between Europe’s vision for a sustainable, competitive, and innovative future and suggested practical steps to achieve that vision. Panellists across the board highlighted how Europe has an opportunity to simplify, innovate, and transform. However, this will require political will, public-private collaboration, and a commitment to the long-term reforms necessary to ensure that Europe can compete globally.