Brussels and the burden of regulation

Europe finds itself in a worrying economic situation, hindered by excessive regulations which stifle innovation and investment. Global competitiveness requires active deregulation, allowing the European economy to regain its growth and power. Faced with comparative decline relative to the United States, Europe must rethink its regulatory approach and opt for concrete actions to avoid continued stagnation.

Europe must deregulate. To be competitive on the world stage, it needs economic growth. In recent years, EU regulators have relegated investment and innovation to second place in favour of the precautionary principle. Europe has drowned its economy in an ocean of regulations, from Google Maps to e-cigarettes. The result? A gradual descent into poverty. American wealth is soaring whilst Europe lags behind. It's not enough to slow the wave of regulation. Europe must actively reduce regulation. Brussels must give up the regulatory power it has acquired.

Europe's need for growth is becoming more urgent every week. As the United States grows richer, Europe is rapidly becoming a poor continent. Since 1990, the American economy has grown twice as fast¹ as the eurozone economy. The average American lorry driver² now earns more than most mid-career European white-collar workers³. If Europe doesn't change course, the situation will only get worse in the coming years. Excessive regulation is driving emerging industries like AI, which is almost exclusively dominated by the United States, to avoid launching their products⁴ in Europe, let alone investing there.

The consequences of this European economic stagnation affect many geopolitical areas. The American president remains the undisputed leader of the free world. Europe's influence, both economically and politically, seems derisory in America's shadow. Ironically, the quest for "world-first regulations"⁵ on subjects like antitrust or climate has further weakened Europe's position on the international stage. A tangle of regulations hampers growth, whilst a more modest economy means that the number of people paying attention to what Brussels says is rapidly dwindling.

Yet it's not too late. With the American administration criticising⁶ Europe for its excessive regulations, a change of course is beginning in the highest spheres of power. From European Commission President Ursula von der Leyen to Polish Prime Minister Donald Tusk⁷, several influential figures in Europe are now advocating for innovation and growth rather than a frenzied race to regulate.

Fine words about administrative simplification are a good start, but to truly unleash European economic growth, we need radical action. However, so far, the EU's approach in this area leaves much to be desired. Brussels is working on a "competitiveness compass" to define policy direction. Whilst some intentions in favour of innovation⁸ in AI are laudable, this approach risks repeating the mistake of the past decade: excessive attachment to centralisation.

Economic growth doesn't need central planning. Europe must stop endlessly producing white papers, strategies⁹, "plans" and "missions" and getting lost in political discussions without concrete actions. Regulation is not the solution. The United States proves this: without central planning, its economy has prospered. The magic of the free market lies in the fact that the state only needs to do one thing to promote growth: stay out of the way.

This problem doesn't affect Europe when it comes to regulation. When it comes to regulating, Europe doesn't talk: it acts. It adopts ambitious laws like the Digital Markets Act and implements large-scale projects like the Green New Deal. If only Brussels applied the same dynamic to deregulation, the European economy could finally grow.

Even an ultra-polarised American political climate, oscillating between Democratic presidents and Donald Trump, hasn't slowed US economic growth. Companies continue to invest there with confidence, knowing that the overall political direction is clear: the free market reigns. There's no American equivalent to the Digital Markets Act. Even today, as Donald Trump disrupts entire industries with his protectionist "America First" policies, American growth should far exceed that of Europe over the next decade. Can anyone provide me with an official document on America's growth strategy in recent decades?

In recent years, the EU has multiplied speeches about its ambition to create the world's safest, cleanest and greenest market through regulation. In practice, this amounts to sending a clear message to global innovators and investors: Europe prioritises caution over growth. Result: capital flees, and local entrepreneurship is stifled. It's European citizens who pay the price, with rising taxes and stagnant wages.

If Europe wants to make its "turnaround" in favour of growth a long-term reality, it must signal to the world that it has truly changed course on regulation. Publishing new hundred-page documents on centralised growth "strategies" won't change anything. The only way to make a difference is to drastically restrict its own regulatory mandate by repealing existing laws and developing simple, clear plans without new regulations.

Given the EU's recent obsession with antitrust laws and the enormous potential for global AI growth, technology regulation would be a good starting point. The EU should almost entirely abolish the Digital Markets Act, the Digital Services Act and GDPR. This would be a strong signal sent to the global technology industry, encouraging it to build its factories and data centres in Europe, and most importantly, it would allow European competitors to finally emerge and compete with the United States. This would make Europeans richer.

This may seem extreme. Such a repeal would amount to abandoning the EU's technology rules. Fortunately for Brussels, it doesn't need to bear the burden of regulation alone, because, like the United States, it's composed of member states that can take on this responsibility. Competition stimulates the free market. By deregulating and decentralising, Brussels could enable the democratically elected governments of the 27 member states to attract private investment. Once freed from European bureaucracy, those EU countries that manage to stimulate growth would actually make Brussels triumph.

European regulation has become uncontrollable. European leaders display an encouraging willingness to deregulate, but they must resist their tendency to centralise. The best way for the European economy to grow is for EU regulators to actually withdraw from it. The problem is that few people, outside Europe, believe in their real willingness to restore the continent's economic and political power. Brussels must prove them wrong through major actions.