Europe's Urgent Call for Reform: Closing the Competitiveness Gap

Germany and Italy are pushing the EU for reforms to enhance competitiveness and simplify procedures to prevent falling behind the US and China. Their policy paper, targeting the Leaders' Retreat in Belgium, calls for strategies to support businesses and foster deeper market integration within the EU.

Germany and Italy are set to push other European Union members to undertake significant reforms aimed at simplifying procedures and bolstering competitiveness. The warning comes as Europe faces the risk of trailing further behind the economic prowess of the United States and China, a recently reviewed policy paper reveals.

According to the document, which is meant for discussion at the Leaders' Retreat in Alden Biesen, Belgium, in February, the stakes are high for Europe's living standards and sovereignty. The statement emphasizes that the status quo is untenable, urging Europe to take decisive action. The German Chancellor and Italian Prime Minister will advocate for a unified EU strategy to support businesses, attract investment, and strengthen the single market.

The policy paper underscores the need for easing regulatory burdens and presents IMF data suggesting substantial internal trade barriers. It calls for procedural improvements, such as fast-track approvals and the repeal of outdated laws, while proposing deeper integration in areas like services and energy. Additionally, the paper advises on accelerating trade talks with global partners and affirms readiness for protective economic measures.

(With inputs from agencies.)