What the EU does
Growing challenges such as climate change, artificial intelligence and geopolitical tensions are changing the world we live in. In order to thrive in this new landscape, we need to ensure that Europe is a place where growth and innovation can continue to be fostered.
To ensure that European businesses can thrive in the global marketplace and to deliver sustainable prosperity for all people in the EU, the Commission is placing competitiveness at the heart of its economic agenda.
The Commission’s work in this area is guided by the Competitiveness Compass and the Draghi report.
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Expected outcomes
The Competitiveness Compass
In January 2025, the Commission presented the Competitiveness Compass, a new roadmap to restore Europe’s dynamism and boost our economic growth. The Compass builds on the analysis of Mario Draghi’s report on the future of European competitiveness and provides a strategic framework to drive the Commission' work during this mandate.
The Draghi report originally identified three imperatives for the EU to boost its competitiveness:
- Closing the innovation gap
- A joint strategy for decarbonisation and competitiveness
- Increasing security and reducing excessive dependencies
The Competitiveness Compass sets out an approach and measures to translate these imperatives into reality.
Closing the innovation gap
The Compass spells out how the European Union will boost innovation by:
- creating a friendly environment for young companies to start and expand, with a dedicated EU Start-up and Scale-up Strategy
- helping big companies adopt new technologies such as artificial intelligence (AI) and robotics, thanks to an “Apply AI” initiative
- making it easier for companies to operate across the EU by simplifying rules and laws, with a proposal for a 28th legal regime that will guarantee one set of rules across the EU
- supporting the development of new technologies, with action plans for advanced materials, quantum, biotech, robotics and space technologies
A joint roadmap for decarbonisation and competitiveness
The Compass sets out how we can facilitate access to affordable energy by:
- putting forward the Clean Industrial Deal, to help reduce carbon emissions, especially for energy intensive companies, and facilitate their transition to low carbon technologies
- presenting tailor-made action plans for energy intensive sectors, such as steel, metals, and chemicals, which are the most vulnerable at this phase of the transition
- developing an Affordable Energy Action Plan to help bring down energy prices and costs
Reducing dependencies and increasing resilience and security
The EU already has the largest and fastest growing network of trade agreements in the world, covering 76 countries.
The Compass identifies how we can further diversify and strengthen our supply chains by:
- developing a new range of Clean Trade and Investment Partnerships to help secure supply of raw materials, clean energy, sustainable transport fuels, and clean tech from across the world
- reviewing the Public Procurement rules to allow for the introduction of a European preference in public procurement for critical sectors and technologies
Five horizontal enablers for competitiveness
To complement these three pillars, the Competitiveness Compass introduces five horizontal enablers to increase our competitiveness across all sectors:
- Simplification
- Lowering barriers to the Single Market
- Financing competitiveness
- Promoting skills and quality jobs
- Better coordination of policies at EU and national level
Timeline of key actions
- Q1 2025
AI Factories Initiative
Clean Industrial Deal and an Action Plan on Affordable Energy
The White Paper on the Future of European Defence
Preparedness Union Strategy
Internal Security Strategy
Omnibus simplification and definition of small mid-caps
Union of Skills
- Q2 2025
Start-up and Scale-Up Strategy
New State Aid Framework
European Savings and Investment Union
- Q3 2025
Space Act
Sustainable Transport Investment Plan
- Q4 2025
Quantum Act
Digital Networks Act
Industrial Decarbonisation Accelerator Act
- 2025
Carbon Border Adjustment Mechanism Review
Critical Medicines Act
MFF, including Competitiveness Fund
- Q4 2026
Circular Economy Act
- 2026
28th regime
European Research Area Act
Advanced Materials Act
Revision of directives on Public Procurement
Revision of the Standardisation Regulation
Key achievements
- The EU provides a stable and secure framework for companies developing digital technologies, through measures such as the Data and Data Governance Acts, the Cyber Resilience Act and the AI Act.
- Lowering the price of energy is vital to boosting our competitiveness. EU actions following Russia’s invasion of Ukraine have allowed us to return to pre-war level energy costs. Meanwhile, our investments in clean energy enabled us to produce more electricity from wind than from gas in 2023 for the first time ever. More than one-fifth of the world’s clean technologies are developed in the EU, and Europe is a world leader in the development of wind turbines, electrolysers and low-carbon fuels.
- The EU has the largest and fastest growing network of trade agreements in the world, covering 76 countries. We are the number one trading partner for 72 countries, representing 38% of world GDP. In 2022, the value of EU trade through free trade agreements with global partners surpassed €2 trillion for the first time.
- The Commission has set ambitious targets to reduce reporting requirements by at least 25% for all companies and at least 35% for SMEs, and eventually expand these reductions to all types of administrative burden This is part of an unprecedented EU simplification effort, which aims to encourage business dynamism and attract additional investment to Europe.
- The EU boasts a large pool of skilled workers, strong education and training systems, and a robust welfare state. Today more than 216.5 million people, or over 75% of the population, are employed, more than at any other time in the EU’s history.