What should be done in the EU? Part I

In our Convoco Edition, The Standing of Europe in the New Imperial World Order, some of our thinkers have offered their thoughts on the question: 

What should be done in the EU? 

Europe needs an opportunity- and future-orientated narrative

The EU should promote scientific and technological innovation to a much greater extent. Research, development and innovation should be priorities in the EU’s budget for 2021-2027.

Intersectoral cooperation at the European level is necessary.

We need a regulatory framework that enhances and promotes the pace of scientific and technological development. Following the “fit for innovation” principle, we must assess whether regulations promote innovation, or at least do not create new barriers.

The European Single Market must be completed and differences in national regulations should be removed.

How can Europe play a leading role in digital transformation?

Most of the world’s economic growth will be linked to the digital transformation. To sustain the welfare state, Europe needs to generate added value, and that means technology and products. Therefore, Europe is called upon to work together more closely: federalized efforts and collective action must be at the fore. 

A proposal to revolutionize EU spending

The EU’s budget comprises around 1 trillion Euros, 30 billion of which should be set aside for the digital sector. The cohesion and agriculture policy budgets will need to be decreased in favor of promoting digital technologies and innovation. Unsurprisingly, this proposal is met with significant resistance from Member States. But we cannot meet our goals without increasing our spending in the digital sector.

Europe should support innovation and enable faster scaling.

The EU’s financial framework favours the protection of existing industries, particularly agriculture. Instead, the EU should strengthen growth and innovation, and issues concerning the future should be addressed collectively. A good example is the European Research Council (ERC) in which researchers compete for financial funding . The result is that cutting-edge research is promoted and international scientists are attracted to Europe.

We must enable faster scaling to make European businesses internationally competitive. To do so, we need an inventory of existing barriers that hamper a total market integration in Europe.

The capital markets in Europe need to be developed to drive on private investments. The need for venture capital in innovative businesses shows that the existing funding model in Europe must be supplemented. Otherwise, we will continue to lose businesses to non-European investors.

The EU should develop regulatory frameworks that can serve as a global role model

The EU should strengthen its cooperation with regard to technological challenges, harmonize national 5G strategies, and create a resilient cyber-infrastructure. At the same time, Europe should pursue the route it took  in establishing GDPR and develop regulatory frameworks that can serve as a global role model for dealing with new technologies such as artificial intelligence. In this context, plurilateral agreements are important, particularly in order to make the conflict between China and the US more productive.

The EU could create its own stable coin

This “stable coin”, i.e. a currency that is stable particularly by comparison with the volatility of Bitcoin, could be a common European currency. It could differentiate itself from the privatization of the monetary system by Facebook’s Libra or Amazon Coins.

How should the digital economy be regulated?

We need smart regulation instead of excessive sets of rules that are already outdated by the time they complete protracted legislative procedures.

A reform of antitrust law should focus on innovation and must not fall victim to the lobbyists of obsolete business-models or tech giants.

European politics must decide on how to delineate markets.

Political decision-makers should determine criteria for market delineation to avoid controversies such as Siemens/Alstom.

Antirust law needs an open concept of “competition dominance” to supersede the concept of market dominance in order to cover phenomena of the digital economy that have no direct link to the market, such as the digital gatekeepers, search engines and platforms that operate upstream the actual market.

An agile competition policy needs a reorientation of antitrust agencies. For example, it is important that structural adjustments in markets in transition to global status or who are on the way to replacing technologies must not be held back by the prohibition of mergers. Markets with a volume of €100 million and who do not affect end users could be exempt from merger control.

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