We encourage you to read the open letter addressed to Ursula von der Leyen, President of the European Commission. Together with representatives of free-market think tanks from across Europe, we present a concrete plan for systemic reforms that might unleash the potential of our continent and allow us to catch up with world leaders.
Dear Madam President,
We are encouraged by your determination to fight for the competitiveness of the European economy. We, the representatives of free-market think tanks from all over Europe, have been alarming for years: the European Union must step up its game to avoid becoming a global outsider. But it is not enough to sound the alarm—that is why today, we are presenting a concrete plan for systemic reforms that will unleash the potential of our continent and allow us to catch up with the world leaders.
Draghi’s report is clear: overregulation stifles European business, and the lack of open capital markets and services pushes us into the abyss. Europe is losing out to the USA and China, which is getting more painful. Production is moving to Asia and South America because EU ESG and environmental regulations are raising costs to absurdity. The technologies of the future – artificial intelligence, quantum computing, and blockchain – are developing elsewhere. As much as 80% of global financial transactions are handled by American and Chinese fintechs because the EU lacks a competitive digital infrastructure. These are not predictions; this reality requires an immediate response.
We appreciate your efforts. The January 2025 edition of the ‘Competitiveness Compass,’ with 30 ideas for cutting red tape and boosting innovation, is a promising sign. The Omnibus Package, which is expected to reduce companies’ administrative costs by 25% in February and up to 35% for SMEs, is a hopeful sign. Uniform regulations for cross-border companies in bankruptcy, labor law, and taxation are a significant step forward. We see this as a willingness to act.
But history teaches us to be cautious: Ambitious plans for deregulation have been on paper since 1995. We focus on systemic solutions that will not drown in a sea of good intentions.
What is the problem? Excessive regulation, market fragmentation, trade barriers between EU countries, the lack of a single capital market, and complete freedom of services are just the beginning. Unstable, complicated tax systems deter investors, especially those outside the European Union. Overzealous ESG and climate regulations stifle innovation and kill the industry, making us less competitive compared to regions with less bureaucracy.
Our demands are concrete, feasible, and – in fact – reducible to one sentence: Europe needs a free market, not more directives!
First, we propose breaking up the Commission’s legislative monopoly. The centralization of the power of initiative in the hands of the Commission cuts the Union off from the real problems of national economies. After voting on the project in its parliament, each Member State should submit specific regulations to the Commission for consideration and a vote in the European Parliament. This is a way for EU law to stop being an ideology detached from reality and become a response to the daily challenges faced by companies and citizens, from Portugal to Poland.
Secondly, we call for unblocking the single market for services and capital. The lack of complete freedom of services and an unconsolidated capital market is a brake on growth. The EU must remove the national and EU-wide barriers that block the flow of services, primarily digital services. We propose harmonizing the rules for tech start-ups and introducing a ‘capital passport’ for companies investing in more than one member state. Europe needs its own ‘Silicon Valley’ – and it won’t have one without smooth access to funds and markets!
Thirdly, we favor deregulation over a regulatory spiral. Every new regulation creates further costs and complications. It is time for a change of approach. Instead of multiplying regulations, let us introduce the principle of ‘one in, two out’ and a regular review of existing rules for their impact on competitiveness, with the participation of entrepreneurs and not just officials. Excessive bureaucracy does not protect the climate or employees—it destroys jobs!
Fourthly, we demand a sensible approach to ESG and the green transition. We do not deny climate change, but current ESG regulations are like a sledgehammer to a nut – far too costly and far too ineffective. We propose a moratorium on new environmental requirements until their impact on industry has been assessed. Instead of penalties and orders, let’s focus on incentives: tax breaks for companies investing in green innovations and simplified procedures for low-carbon technologies. Production in the EU must be profitable – otherwise, it will move to places where standards are lower.
Finally—and fifthly—you need to be aware that the recommendations presented here are just the tip of the iceberg—a selection of the extensive proposals our think tanks have worked on for years. Organizations that have signed the appeal declare their readiness to prepare specific recommendations based on our long-standing analytical activities and a series of reports analyzing the legal environment for the European Union’s economy.
Madam President, Europe is at a crossroads. We decide on bold reforms: market-oriented, deregulatory, pro-development, or in a decade, we will wake up as an economic museum, nostalgically recalling the glory days. We believe the EU will choose the future over stagnation under your leadership. Our proposals are not pipe dreams – they are a concrete plan backed by the analyses and experience of free-market thought leaders from all over Europe.
We are counting on dialogue and action here and now.
Warsaw Enterprise Institute
Foro Regulación Inteligente
Taxpayers Foundation of Europe
We Are Innovation
Conservative Institute of M. R. Štefánik
Libera Foundation
Prosum Foundation
Economic Freedom Foundation
