EU Pushes AI, Biotech, and Clean Energy to Boost Competitiveness
The European Union (EU) plans to prioritise artificial intelligence (AI), biotechnology, and affordable clean energy in a strategic push to enhance its global competitiveness. A draft European Commission paper, seen by Reuters, outlines steps to ensure the EU pushes AI and Biotech to remain an economic leader and keep pace with rivals like the US and China.
Strategic Shift to Innovation and Decarbonisation
The draft paper, known as the “Competitiveness Compass,” identifies 29 measures to be implemented over the next two years. These strategies aim to increase productivity through innovation and decarbonise European manufacturing.
“It is time to turn to action,” the document states. “Without an urgent shift in gear and approach, the EU’s future as an economic powerhouse, an investment destination, and a manufacturing centre is at stake.”
Key focus areas include AI, advanced materials, robotics, space exploration, clean energy, and biotech. These sectors are deemed critical for Europe’s economic future.
The paper reflects recommendations from a 2022 report by former European Central Bank chief Mario Draghi, which urged the EU to coordinate industrial policy and invest heavily to remain competitive against the US and China.
Simplifying Regulations Amid International Pressure
The EU faces increasing pressure to simplify business regulations, particularly from member states like France. President Donald Trump’s administration has also criticised EU red tape and is threatening tariffs on EU exports, urging the bloc to reduce regulatory barriers.
France has been vocal about the need for what it terms a “simplification shock.” French Finance Minister Eric Lombard emphasised the need to cut rules that hinder corporate growth, calling on the European Commission to take decisive action in its first 100 days.
Key Proposals in the Competitiveness Compass
The European Commission’s plan includes the following:
- Revising EU chemical regulations to streamline compliance.
- Launching “AI factories” to encourage innovation.
- Reducing sustainable reporting requirements by 25%.
- Cutting energy costs, which remain significantly higher in the EU than in the US.
- Improving digital infrastructure, energy grids, and manufacturing of critical medicines.
The EU will also introduce its Clean Industrial Deal in late February to coordinate decarbonisation efforts across industries.
French Push to Delay Environmental Regulations
France has presented additional proposals to delay or revise environmental regulations, arguing that new EU rules have impacted competitiveness. France seeks to postpone the Corporate Sustainability Reporting Directive (CSRD) by two years and indefinitely delay corporate due diligence regulations.
Paris also aims to push back the implementation of the Basel bank capital rules to 2027, aligning with the UK. The broader goal is to give EU companies more time to adapt while maintaining a level playing field globally.
Germany has joined France in advocating for less regulatory burden on European businesses to ensure the bloc remains competitive with faster-growing economies like the US and China.
With inputs from Reuters
