The European Commission has published the Competitiveness Compass to pave the way for Europe towards higher competitiveness. Eliminating obstacles in the European single market is at the core of the measures. While this work is important, it must not lead to any deterioration of working conditions and employment terms.
The European Commission has today published its first major initiative, the Competitiveness Compass. It is based on reports by former Italian Prime Ministers Enrico Letta and Mario Draghi on the European single market and competitiveness. Its purpose is to concretise the recommendations given in the reports and to pave the way for Europe towards higher competitiveness on a global scale.
According to preliminary data, the Competitiveness Compass is very broad and consists of several initiatives aimed at reviving productivity-based innovation and ensuring a competitive and technology-neutral transition to a carbon-free economy. In the face of intensified global competition, Europe needs to secure its place in key technology sectors, ensure economic flexibility and manage security risks. It is also essential to ensure high skills and quality jobs for everyone. Eliminating obstacles in the European single market and building an investment and capital union are at the core of the measures. The budget also needs to be reformed and reallocated.
Two prerequisites for success are considered to be better coordination between the national and EU level, and simplification and acceleration of the regulatory environment.
As part of the Competitiveness Compass, an alternative harmonised framework of rules for companies operating in the European single market has also been discussed. The initiative has been referred to as the “28th Regime”. The idea is to build a separate legal regime alongside the Member States’ regulatory frameworks to simplify the applicable rules and reduce the costs of failure. It addresses perspectives related to insolvency, labour law and tax law.
Regulation ensures fair rules
Deregulation and its simplification is a concern for wage earners. It is certainly in everyone’s interests that companies can focus on their business, their administrative burden is as light as possible and the operating environment enables agile operations.
However, regulation ensures common rules for the European Union and the European single market which is why unambiguous deregulation is challenging, unless its principles are clearly defined.
A legally secure, uniform and fair competitive environment is in the interests of small Member States like Finland. When setting targets for deregulation or reduced regulation, it is essential to address and assess the resulting impact not only on the European single market and the companies operating there but also on citizens and employees. It must be ensured that lighter regulation and monitoring does not lead to dumping, neglect or the increased exploitation of individuals.
A legally secure, uniform and fair competitive environment is in the interests of small Member States like Finland.
There is broad agreement on the overview of the situation in the EU’s economic area, regardless of with whom you talk to about it. It is obvious that, to succeed, the EU needs to take swift action for competitiveness. When planning measures, it should be kept in mind that Europe cannot keep up with global competition by weakening working conditions or employment terms. On the contrary, the reports of Letta and Draghi emphasise the need to invest in the competence of the workforce and the development of working life. These steps will also help attract the necessary skilled workforce to Finland and Europe.
In the light of preliminary data, it is therefore reassuring that the European social market economy is perceived as a competitive edge, and the promotion of the Pillar of Social Rights plays a central role in the Competitiveness Compass. The EU can only ensure that the improvement in competitiveness does not come at the expense of employees and people, but benefits everyone, by developing common minimum labour and equality legislation and social rights.
This may also call for reporting and administrative work. In this case, it will by no means be extra or excessive.
Maria Häggman
The author is the Head of International Affairs at STTK.