The European Union is grappling with significant economic challenges as it attempts to revitalize its innovation landscape and foster business growth. EU President Ursula von der Leyen has recently announced the Competitiveness Compass, a strategic initiative aimed at addressing the EU's structural weaknesses and enhancing its global competitiveness [61b899df][74ffead2]. This comes in the wake of the EU's Lisbon Strategy, which was launched over 20 years ago with the goal of creating a competitive knowledge-based economy but has ultimately led to stagnation and high energy costs [74ffead2].
As the EU faces increasing pressure from the U.S. and China, its reliance on external demand rather than internal investment has drawn criticism from the U.S. Treasury, raising concerns about the sustainability of its export-led model [74ffead2]. Von der Leyen's initiative aims to create a favorable environment for businesses while also focusing on achieving green goals, but critics argue that the Competitiveness Compass lacks substantive measures to address the fundamental issues plaguing the EU economy [74ffead2].
The euro and strict fiscal rules have been identified as hindrances to growth, and the EU's neoliberal bias against industrial policy leaves it ill-prepared to compete with state-led economies like China and the U.S. [74ffead2]. Additionally, the EU's bureaucratic governance complicates effective policy implementation, which may undermine the potential impact of the Competitiveness Compass [74ffead2].
In light of these challenges, a radical revision of intra-European collaboration has been suggested as a necessary step to foster a more resilient economic framework [74ffead2]. This initiative is further complemented by the EU's plan to establish a new category for medium-sized enterprises, aimed at reducing regulatory burdens and encouraging innovation [61b899df].
As the EU embarks on this new economic path, the debate continues over whether adopting a more technocapitalist model, similar to that of the U.S., is the right approach to bridge the widening economic gap and foster a sustainable future for its member states [1d494d8b][5cbea330].