The European Commission, under Ursula von der Leyen’s second presidency, has unveiled its Competitiveness Compass, a strategy aimed at bolstering the EU’s economic standing on the global stage. While presented as a necessary measure to streamline regulations and liberate businesses from bureaucratic burdens, the initiative has sparked significant apprehension amongst civil society groups and unions, who fear it represents a thinly veiled shift towards deregulation, potentially undermining crucial social and environmental protections. Their concerns center around the potential erosion of workers’ rights, the weakening of environmental safeguards, and a perceived prioritization of corporate interests over broader societal well-being.
A central point of contention lies in the Commission’s proposal to simplify existing EU legislation. While the Commission argues this will reduce unnecessary burdens on businesses, critics view it as a potential pathway to dismantling vital regulations protecting workers’ rights, environmental standards, and consumer safety. The European Trade Union Confederation (ETUC), for instance, has expressly rejected the Competitiveness Compass, arguing that it lacks crucial social considerations and could lead to job losses, diminished rights, and a lowering of standards. They particularly object to proposals for pension reforms and measures promoting longer working lives, viewing them as detrimental to workers’ well-being.
Adding fuel to the fire is the Commission’s revival of the concept of a ’28th legal regime,’ a supranational system governing corporate law, insolvency, labor regulations, and taxation. While proponents argue this will create a more unified and efficient business environment, critics fear it will allow companies to circumvent the distinct legal frameworks of individual member states, potentially leading to a race to the bottom in terms of social and environmental protections. This concern is particularly acute in the context of tech start-ups, where the EU has struggled to compete with other global players.
Environmental organizations share similar anxieties, acknowledging the need for increased competitiveness but questioning the Commission’s approach. While they welcome the stated commitment to achieving net-zero emissions by 2050, they express skepticism about the Compass’ ability to steer industry towards genuine sustainability. The absence of concrete plans to phase out fossil fuels and the perceived underemphasis on energy efficiency are seen as critical shortcomings that could undermine the EU’s climate ambitions. Furthermore, concerns have been raised about the potential weakening of the corporate sustainability reporting framework, a crucial instrument for holding businesses accountable for their environmental and social impact.
Beyond climate action, the lack of attention to broader environmental issues has also drawn criticism. The narrow focus on CO2 reduction, without adequate consideration for biodiversity loss and pollution control, is viewed as a significant oversight that could ultimately hinder long-term economic growth and competitiveness. Critics argue that a holistic approach to environmental protection is essential, not only for ecological reasons but also for ensuring a healthy and productive workforce and a sustainable economic foundation.
The contrasting perspectives of civil society groups and business lobbies further highlight the divisive nature of the Competitiveness Compass. While organizations like WWF and CAN Europe express concerns about deregulation and the potential undermining of environmental progress, BusinessEurope, a prominent industry lobby group, welcomes the Commission’s direction, emphasizing the need for reduced regulatory burdens and streamlined bureaucratic processes. This stark contrast in viewpoints underscores the inherent tension between economic competitiveness and social and environmental responsibility, a tension that the Commission must navigate carefully to ensure a truly sustainable and equitable future for Europe. Ultimately, the success of the Competitiveness Compass will depend on the Commission’s ability to address these concerns and strike a balance between promoting economic growth and safeguarding fundamental social and environmental principles.
