EU revises its economic targets

The European Commission (EC) presented the "Competitiveness Compass" in Brussels, a strategy geared towards strengthening the EU's economic position in the face of increasing global competition. Prof. Barbara Antonioli Mantegazzini, Adjunct Professor at the Faculty of Economics of Università della Svizzera italiana (USI) and Vice Director of the Institute for Economic Research (IRE), commented on the EC's choices on SEIDISERA (Rete Uno - RSI).

The EU strategy is based on the report on the future of European competitiveness presented by Mario Draghi in September. European Commission President Ursula von der Leyen has stated that despite being the second largest economy in the world, with a strong industrial base and a skilled workforce, the European economy has been struggling with productivity growth in recent years. This lag has hindered the energy transition process and has reinforced a reliance on fossil energy imports, especially from Russia. Europe is currently falling behind the United States in some advanced technologies and risks being overtaken by China, which has made significant improvements in innovation and productivity.

The strategy outlined in the Compass is based on three core areas for action: First, it aims to reduce Europe's innovation gap by emphasising artificial intelligence (AI), which is currently utilised by only 1 in 7 European companies. The goal is to make Europe more attractive to businesses that use AI. The second area addresses decarbonisation and competitiveness, which many industries view as conflicting goals. Achieving this objective is challenging due to high energy costs and the automobile industry's need to transition to electric vehicles more quickly. The third point involves reducing excessive dependence, particularly the EU's reliance on Russian energy. To accomplish this, it is necessary to reform internal European regulations that have historically hindered companies from competing with foreign counterparts.

The inclusion of a point concerning decarbonisation shows that the EC has taken note of an important issue, as explained by Professor Barbara Antonioli Mantegazzini. "The burden of complying with environmental regulations can be quite heavy, particularly for small and medium-sized companies, which are prevalent throughout Europe. Therefore, I believe the European Commission's initiative is a positive step forward. They propose a 25% reduction in administrative burdens for companies, which could increase to 35% for small and medium-sized enterprises. Additionally, there are plans to simplify procedures for start-ups to encourage innovation and competitiveness. By creating a more streamlined regulatory environment, we can promote economic growth.," commented IRE's Deputy Director.

The EC's choice, however, has worried some, who fear it is a step backwards, also given the current climate generated by the Trump administration's recent initiatives. "This is not a setback in the progress that has been made, as there are no changes to the targets for reducing emissions. Instead, it acknowledges that transitioning to new energy sources requires engaging with the energy industry and addressing its various challenges. The document emphasises the importance of innovation and productivity, aiming for Europe to become a hub for the development, production, and marketing of future clean technologies. This effort will also leverage the skills of highly trained professionals, all while maintaining a focus on achieving climate neutrality," Professor Antonioli Mantegazzini concluded. Financing the project will require around EUR 800 billion per year, which will require the harmonisation of public and private strategies by combining several funding streams.

The full interview with Professor Barbara Antonioli Mantegazzini is available at the following link ( from minute 14:37).