The European Union would have a better chance of catching the U.S. if it aimed for growth, instead of rearranging the regulatory deck chairs. Lowering political barriers in the 27-country single market could boost investment without breaking the bank on subsidies, Jean-François van Boxmeer told Breakingviews, citing a new European Round Table for Industry report. The Vodafone (VOD.L) chair said policymakers should turn their shepherding instincts toward goals like expanding the electricity grid, speeding up merger decisions and linking EU capital markets instead of trying to guarantee a “fantastic outcome only by regulating”.
Business leaders would say that, even as the EU has made great strides promoting sustainable finance and keeping rich member states from elbowing out poorer peers via unmatchable floods of state aid. But setting limits also has downsides. In the telecommunications sector, the European Commission has kept four providers in most of the EU’s markets, and screens out Chinese equipment-makers over security concerns. Better to shift to three providers in big markets and two in small ones, letting companies use cross-border savings to build out 5G networks and spur industrial modernisation, van Boxmeer and Investor AB (INVEb.ST) Chair Jacob Wallenberg said.
The European Commission reckons completing the single market by 2030 would hike EU GDP by 12%, or 713 billion euros. That’s a big enough prize to justify a new approach. (By Rebecca Christie)
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