The dark side of EU deregulation
The bloc’s efforts to reduce bureaucratic red tape risks undermining its role as a global standard-setter
[CAMBRIDGE] The winds of deregulation are blowing across the Atlantic, with the European Union following in America’s footsteps and launching its own push to unleash the magic of the market. At first glance, this shift might seem like a direct consequence of US President Donald Trump’s return to the White House. But that interpretation overlooks the deeper structural forces at work.
Since early 2023, amid widespread farmers’ protests and growing calls from some EU leaders for a “regulatory pause”, European Commission president Ursula von der Leyen has been distancing herself from her signature legislative achievement – the European Green Deal. The reversal caught many by surprise, but it ultimately helped her secure a second term.
Meanwhile, former European Central Bank president Mario Draghi’s report on the state of the EU’s economy, commissioned by von der Leyen, has reinforced the idea that many of the bloc’s competitiveness problems stem from “inconsistent and restrictive regulation”. In response, von der Leyen has introduced the Competitiveness Compass – a road map aimed at drastically reducing the EU’s administrative burden by “simplifying the regulatory environment” and “favouring speed and flexibility”.
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