The Confederation of Swedish Enterprise seeks to share its priorities and reactions in respect of those focus areas emerging from the new European Commission as it begins its mandate period. While the Commission has yet to formally set out its agenda, certain themes - such as competitiveness, innovation, security and economic growth - are undoubtedly in the spotlight.
It is clear that the new Commission has to enhance Europe’s competitiveness by reducing administrative burdens, fostering innovation, and enabling growth. A business-friendly regulatory environment is vital for ensuring long-term competitiveness and economic strength. These interconnected and horizontal issues reflect critical areas where alignment with the Commission’s evolving focus will be essential. Here are some of our Key Messages for the New European Commission:
The ”Competitiveness Check” is intended to ensure that new EU legal acts, policy programs, and strategies undergo a comprehensive review to assess their impact on competitiveness, also towards third countries. A clear methodology for assessing this impact should be mandatory in the legislative process. The ‘one in, one out’ principle should be fully implemented to avoid increasing regulatory burdens.
The Commission should focus on fewer, more impactful proposals, with thorough impact assessments and stakeholder consultations. Before adopting new legislation, the Commission should spend time evaluating existing regulations through an ‘evaluation bank’. The Regulatory Scrutiny Board (RSB) should be given more independence and authority, including approval of proposals before adoption, ensuring regulations support business growth and competitiveness.
It is crucial to emphasize the role of the wider business community in achieving both comprehensive civil and military preparedness, as also acknowledged by the Niinistö Report. By involving companies of all sizes and across sectors, we can ensure a holistic approach that leverages innovation, flexibility, and the unique capacities of the private sector. Our societal resilience at the time of crisis must not be confined to government action alone; the integration of businesses into preparedness efforts is essential for building robust systems that can adapt to future challenges.
The Confederation of Swedish Enterprise supports the findings of the Niinistö report who is calling for EU Member States to increase their capabilities, robustness and preparedness, we urge caution when considering any possible sector-specific exceptions to competition and Single Market rules. Such measures, while well-intentioned, could result in unintended cascade impacts across industries, hindering economic efficiency and competitiveness. A delicate balance must be struck between enhancing security and maintaining the principles of open competition that underpin the success of the Single Market.
The EU’s capital markets should be further developed, by implementing national reforms, which improve efficiency and increase the supply of capital for investment. Harmonization of EU financial markets should only be pursued where necessary and proven to improve outcomes. In addition, it must not harm existing well-functioning systems.
As a first step, Member States should use their national competencies to individually strengthen the efficiency of their financial markets. Best practices should be identified and used as inspiration for initiatives at the national level. Overregulation of financial markets, in response to inadequate investment, risks driving capital abroad to markets outside the EU. The main focus should rather remain on strengthening the competitiveness of European businesses, as an enhanced business environment will attract both foreign and domestic investment. To identify effective solutions requires further analysis, drawing on OECD Capital Market Reviews and international insights.
The EU’s complex digital regulatory environment, including the GDPR, the AI Act along with others such as the DMA, DSA, and the Data Act, are hindering innovation and complicating compliance. This is particularly true for start-ups and SMEs. To improve the business environment and encourage investment, the EU needs to simplify and harmonize its current rules, ensure impact assessments for any new legislation and avoid overregulating areas already covered by existing frameworks such as the GDPR. A focus on clarity, predictability and reducing compliance costs is essential for fostering a competitive tech sector.
The electronic communication regulations in the EU are highly fragmented, with different rules at national and even regional level. Fragmentation makes it particularly difficult for actors who want to scale up and operate across borders, and it also discourages the willingness to invest in the EU. Crucial measures for the digital networks of the future are therefore to harmonize and simplify rules to attract investment, promote innovation, increase security and complete the digital single market.
The commercialisation of innovation requires that new ideas or inventions are successfully developed into marketable products or services. Often, it is the intangible assets that are the key to making that happen. The ownership of European patents and trademarks is associated with a fivefold-higher rate of securing early-stage funding compared with the ownership of national intellectual property rights. There are, however, challenges for both the legal protection of intangible assets and for emerging technologies in Europe. This is valid for both copyrights and patents. The poor handling of digital innovations in Europe’s patent system is driving investment to other markets, such as the United States.
The patent system in Europe needs to be improved, as uncertainties surrounding patentability are hindering innovation within the Union. Clear and modernised criteria for patentability are needed, particularly for emerging technologies.
The European Commission is currently reviewing the design of the electricity bidding zones within the EU’s internal energy market. Bidding zones, which determine local electricity prices, are essential for reflecting regional supply and demand, encouraging efficient resource use and ensuring grid stability. Well-designed zones can help integrate renewable energy and optimise pricing; suboptimal zones, however, can reveal transmission bottlenecks or force reliance on cross-border electricity imports. This initiative is a key step toward a more integrated and functioning European electricity market.
To meet the EU’s climate goals of net zero by 2050 and a 55% emissions reduction by 2030, a massive expansion of fossil-free electricity is vital. Energy price volatility also threatens the European economy; the EU must therefore increase its domestic energy production - renewables, nuclear - and its energy efficiency.
To build a water-resilient Europe, the European Commission must create policies that appropriately balance environmental protection with the needs of industry. While harmful substances clearly must be regulated, many restricted substances are naturally occurring and pose no significant risk to health or the environment. Water policies must take into account regional differences in water availability across the EU, recognising that these disparities impact competitiveness and should be reflected in policy design.
The Commission should reconsider these restrictions to avoid hindering important industrial projects that are essential for the green transition.
The new Commission should recognize the importance of member states being able to adapt policies to their specific social frameworks. It is also important to avoid unnecessary transaction costs through the creation of multilayer legislation. Historically, well-functioning national social bargaining systems based on strong social partners are better equipped to handle quick changes in the economy, which is also better from a competitiveness perspective.
State Aid should continue to be limited to addressing market failures, such as fundamental research or green investments where there is no clear business case. Subsidising specific firms and industries can restrict competition and discourage innovative startups, since State Aid often favours larger firms who are equipped with greater resources to be able to influence political decisions and secure government financial support. The EU should avoid ‘matching aid’ linked to subsidies in third countries, as it leads to a race to the bottom and places the EU at a disadvantage because of its slower approval process.
Important Projects of Common European Interest (IPCEI) projects should be deployed for a limited number of research, development and innovation (RDI) and cross-border infrastructure projects; they should not be used for mass production. Given the administrative burden and lack of evaluation of the outcomes of earlier projects, this tool should be used cautiously and sparingly.
In an uncertain world, Europe’s greatest geopolitical asset is its Single Market, the key driver of our future prosperity. Companies benefit most from the Single Market when it serves effectively as a large, single European home market, free from barriers to trade and with clear, simple rules that promote competition. This can be achieved through making effective use of the better regulation toolbox and through better enforcement. The administrative burden - such as the micromanagement of legislation and standards, over-use of delegated acts and the lack of market control and oversight – also needs to be reduced. Addressing these shortcomings, barriers and lingering distortions could boost the EU GDP by as much as 9%, according to a recent analysis by Jacques Pelkmans.
The EU needs to invest in new technology and the green transition as well as more research, development and innovation. In so doing, it is important to treat the Single Market as one by respecting the principles of equality and mutual recognition. Singling out sectors, by providing them with special support and/or exceptions from common rules, risks adding to the administrative complexity and increasing the fragmentation of the Single Market.
It is only when companies are allowed to trade globally that they can thrive and ensure that Europe has the economic muscles needed to take on the massive investments needed in in areas such as defence, cybersecurity and the green transition. The EU should prioritise the quick ratification of the EU-Mercosur agreement, recognising its significant economic and geopolitical value. It should also pursue pragmatic trade negotiations with India, Indonesia and other Asian countries, focusing on achievable goals such as lower tariffs, simplified trade procedures and less divergence between product standards. Where full FTAs are not feasible, ‘mini deals’ in areas such as digital partnerships and raw materials should be explored.
International trade is inherently risky. Yet although risk cannot be fully eliminated, geopolitical risks can be mitigated through tools such as investment screening and export controls to address security issues without escalating conflicts. Rather than creating a new instrument to screen outbound investment, reforming the export control regime to address real dangers it would be a better approach.
Charlotte Andersdotter,
International Director and Head of EU-Office