Greater economic intervention from governments worldwide has led to a reconsideration of the EU’s approach to industrial policy.
Global competition for and access to strategic materials and production, particularly in relation to the green and digital transitions, is further intensifying.
Businesses and Member States must compete with more generous support programmes globally and increasingly within the EU.
The Irish Presidency should drive a response that accounts for intensifying global competition while ensuring a level playing field, balancing areas that are strategically important for the EU as well as the needs of individual Member States.
These challenges mean that the EU must ensure that the European Green Deal’s ambition to address the challenges posed by climate change and enhance sustainability is supported by policies that boost competitiveness and help companies to deliver on the green transition.
To this end, the Clean Industrial Deal and Industrial Accelerator Act are welcome.
The Irish Presidency should work to ensure that these measures ensure the provision of affordable, more secure, and greener energy; quicker development of key infrastructure and housing; connectivity between Ireland’s ports and airports with the rest of the EU and the world; streamlining permitting procedures; and simplification of environmental regulation.
While the EU policy response to the energy crisis has helped secure supply, many businesses have been unable to remain viable or competitive in the face of sustained high energy prices.
While energy prices have lowered from the exceptional levels seen in 2021 and 2022, European businesses, and Irish businesses more so, continue to face some of highest energy costs globally.
These energy cost challenges are having a significant material impact on the ability of business to operate, succeed and compete across the EU.
A more competitive energy and climate transition is possible, provided swift action is taken by the Irish Presidency and the Council to bring renewed attention to energy resilience, affordability, cost-effective decarbonisation, and international collaboration including with the UK.
New measures are needed to increase both the generation and connection of renewables, boost resource efficiency, support industrial decarbonisation and protect European business from carbon leakage.
The Irish Presidency should support strategic and structured dialogue based on the Draghi Report.
Across the EU, the ability to deliver critical infrastructure and housing and keep pace with growing demand has been frustrated by costly and cumbersome planning processes.
Streamlining of permitting processes is crucial for enabling industry to deliver on the ambitions of the twin transition while remaining competitive.
The provision of high-quality infrastructure across all our transport modes and critical utilities has a direct impact on a firm’s productivity and investment potential to expand.
Access to sustainable transport modes, greater capacity at our ports, furthered connectivity through our airports and prioritisation of our underpinning infrastructure such as water, wastewater and broadband will allow EU industry to compete and grow sustainably.
Moreover, strategies on housing construction and affordability must respond to capacity pressures as a substantial threat to our competitiveness and economic wellbeing.
Ireland and Europe’s investment needs are substantial, not least to address current cost competitiveness challenges while simultaneously funding the green and digital transitions which are estimated to cost up to €500 billion per year until 2030.
The Irish Presidency should seek to address this through the development of the Savings and Investment Union (SIU), simplified access to EU funding programmes under the next MFF to deliver on strategic goals as part of robust fiscal capacity to support the twin green and digital transition including through instruments like Important Projects of Common European Interest (IPCEIs) and Projects of Mutual Interest.
Meeting Europe’s investment needs must be supported by carefully designed State Aid rules that support strategic investment while ensuring fair competition and a level playing field between companies and Member States.
A more competitive energy and climate transition is possible, provided swift action is taken by the Irish Presidency and the Council to bring renewed attention to energy resilience
Key recommendations:
Massively increase the deployment and integration of all renewable and low-carbon energy sources, and the necessary infrastructures
Use the Omnibus on taxation due in Q2 2026 to go beyond simple decluttering and engage in real, measurable and radical simplification of a system of tax legislation and reporting requirements.
Protect Europe’s competitiveness in a changing global tax environment by ensuring that Europe does not go it alone in implementation of Pillar 2 without global consensus and an even playing field.
Improve the integration of transport between island Member States such as Ireland and continental Europe as a strategic imperative addressing geographic realities and supporting the development of our airports and ports as strategic assets
Ensure consistent enforcement of existing EU State Aid rules to ensure that a level playing field exists across the Single Market and adopt a broader EU level approach to strategic investment priorities
Ensure there is clear alignment between Horizon Europe and the European Competitiveness Fund to support innovation along the entire investment journey all the way to deployment
Harmonise reporting and compliance requirements across EU environmental regulations, and simplify where possible, to prevent overlaps and duplication.
Read more from the report:
Single Market and simplification: Turning ambition into action
Trade and investment: Strengthening relationships, maximising opportunities
Labour market and social policy: Skills, innovation and EU added value