Entrepreneurs will be able to create pan-European companies under new plans to be unveiled Wednesday, which the EU executive says will make it less of a headache to do business across the bloc.<\/p>\n
The proposal known as “EU Inc” is part of ramped-up efforts to tackle the European Union’s competitiveness problem as the bloc’s economy and industries risk falling further behind the United States and China.<\/p>\n
Trade unions fear, however, the new EU-wide regime will erode workers’ rights.<\/p>\n
EU Inc “has a simple objective: to reduce fragmentation and allow businesses to operate across the single market under one clear set of corporate rules”, EU justice commissioner Michael McGrath told AFP in a statement.<\/p>\n
The voluntary legal regime is aimed at innovative companies in Europe, although it’s not clear how popular it will be.<\/p>\n
Reinhilde Veugelers of think tank Bruegel said the goal was “improving (Europe’s) innovation capacity because that is the most important driver for competitiveness”.<\/p>\n
The measures, also known as the “28th regime”, will become law only after member states and the European Parliament negotiate and approve a final text.<\/p>\n
EU leaders are expected to discuss the proposal during a Thursday summit in Brussels, although the Middle East war and the subsequent oil price shock is likely to dominate their talks.<\/p>\n
– ‘Easy recognition’ –<\/p>\n
McGrath said companies will be able to set up fully online within 48 hours through a single access point, with no minimum capital requirement.<\/p>\n
“Fast and easy recognition should make it easier… for companies to grow on an EU scale,” Veugelers said.<\/p>\n
But the new system’s speed could make it difficult to properly scrutinise new companies, argue campaigners including Olivier Hoedeman of Corporate Europe Observatory.<\/p>\n
“The 28th regime poses a significant threat to Europe’s social model,” he said.<\/p>\n
Organisations representing European workers are also worried about a move to allow companies to offer share options to staff instead of wages.<\/p>\n
Esther Lynch of the European Trade Union Confederation slammed the plans.<\/p>\n
“We cannot expect that the promise of the future success of a company be used to justify wage exploitation in the present,” she said in a statement.<\/p>\n
The commission has insisted labour law will not be touched by the proposal and that any business will have to follow the rules based on where they are headquartered.<\/p>\n
After a leaked draft text came out, industry group EU Inc — which inspired the name of the commission proposal — said the plans fell short.<\/p>\n
It “fails on the actual main goal: creating one true standard across Europe that creates legal certainty for our startups”, since it defers legal authority to national courts, “aka 27 flavours of interpretation”, it said.<\/p>\n
The group called on Brussels to create a central court for dispute resolution.<\/p>\n
The EU’s McGrath said the new regime would help companies avoid navigating 27 legal systems, which “slows growth, increases costs and often discourages companies from scaling up across Europe”.<\/p>\n
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