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Many of the issues discussed in the recent EU summits have a profound impact on social and economic aspects for all the European citizens. Competitiveness is one of them and has been the focus of studies and reports in the last few months, such as the ones prepared by the former Italian prime ministers Enrico Letta and Mario Draghi. What is clear for many EU leaders and officers is that the EU’s competitiveness is intrinsically linked to its social model, which emphasises sustainability, inclusion, and social fairness. Among the various initiatives to boost EU competitiveness, one of the most important is the Competitiveness Compass, introduced by the European Commission as a strategic framework that aims to drive innovation, decarbonisation, and security while focusing on creating a friendly environment for startups and scale-ups, adopting new technologies, and simplifying rules for businesses to operate across the EU. The Compass builds on the recommendations listed by Mario Draghi in his report on the future of European competitiveness and sets out measures to enhance the EU’s competitive standing on the global stage. The Competitiveness Compass also emphasises the importance of a social market economy, which includes considerations for social inclusion and equality in the EU. Such an approach aims to ensure that the benefits of economic growth are distributed in the most equitable way across society, in particular for vulnerable groups.

There are still many obstacles to pursuing a real and concrete agenda for competitiveness in Europe. Right now, the EU lacks an efficient capital market that could turn savings into investments that benefit from the huge economic potential within the bloc and its member states. As stated in the Competitiveness Compass, the Commission will present a European Savings and Investments Union “to create new savings and investment products, provide incentives for risk capital, and ensure investments flow seamlessly across the EU”. In this way, a refocused EU budget will streamline access to EU funds in line with EU priorities.

Another important task is the promotion of skills and quality jobs. The foundation of Europe’s competitiveness is its people. To ensure a good match between skills and labour market demands, the Commission announced that it will present an initiative to build a Union of Skills focusing on investment, adult and lifelong learning, future-proof skills creation, skill retention, fair mobility, attracting and integrating qualified talent from abroad and the recognition of different types of training to enable people to work across our Union.

Finally, another key issue is to reach a better coordination of policies at the EU and national levels. The Commission will introduce a Competitiveness Coordination Tool, which will work with Member States to ensure implementation at the EU and national level of shared EU policy objectives, identify cross-border projects of European interest, and pursue related reforms and investments. As the EU Commission promised, in the next Multiannual Financial Framework, a Competitiveness Fund will replace multiple existing EU financial instruments with similar objectives, providing financial support to the implementation of actions under the Competitiveness Coordination Tool.

Written by: Francesco Marino