After months of wrangling and an epic list of delays, the Commission has finally released its Industrial Accelerator Act.
This could turn into one of the EU’s most consequential industrial policy files in years - and the proposal is honestly not a bad place to start.
Some quick thoughts:
Das klingt ganz gut.
Wenn Deutschland sich bei der gemeinsamen Aufsicht jetzt tatsächlich bewegt, kämen bei der Kapitalmarktunion mal weg von Sonntagsreden und hin zu echten Integrationsschritten.
Max is right. The strategy has to be about creating momentum that brings everyone along.
On capital market integration in particular, this means strengthening existing EU initiatives - not running a six-member-state sideshow.
From what I understand, that’s the direction for now.
X's AI tool Grok reportedly produced 3 million sexual deepfakes in 11 days - today the Commission reacted and opened another formal investigation into X under the Digital Services Act.
Here is what the investigation is about ⬇️🧵
ec.europa.eu/commission/p...
I fully agree! 28th Regime on its own will not be enough, and pensions are a powerful lever that will probably not be touched.
I agree that Europe should not become exactly like the US. Still, the absence of EU tech champions means that we are dependent on Musks and Zuckerbergs for critical infrastructures.
The full report is available here: www.bundesfinanzministerium.de/Content/DE/D...
10/ What is next?
Momentum around the 28th Regime is strong, but negotiations will be very difficult. Pension reforms are even more complicated and lie with the member states. Public money is scarce these days. Here’s hoping we do not go overboard with deregulation measures to compensate.
9/ Third, the report could provide a much-needed push for the SIU. You can take walks on the graveyard of dead CMU agendas, and there's the fear that this time won't be different. However, this report was commissioned by the FR and DE governments, so we have political heavyweights to push it along.
8/ What to make of this?
The report provides a very good description of the problem, nothing completely unheard of, but a detailed and sound analysis. Second, it gives clear recommendations. Especially measures to increase the role of institutional investors in VC could really make a difference.
7/ 5. Listing conditions in Europe are relatively unattractive, pushing firms to list in the US and often relocate. Hence, address gaps between listed and non-listed companies, and reduce listing requirements. Improve integration and liquidity of trading venues.
6/ 4. Create a simple, flexible 28th Regime for corporate law to help European companies scale under a single rulebook, cutting complexity for founders and investors. Harmonise stock-option regimes to further reduce fragmentation for innovative companies.
5/ 3. Optimise public financing mechanisms to support the innovation financing ecosystem in the EU: Design initiatives that help crowd in private investors. Expand the European Tech Champions Initiative, which supports scaleups. Coordinate national initiatives across borders.
4/ 2. Mobilise existing capital pools: Adjust regulatory frameworks that discourage institutional investors from VC investments. Government initiatives like Tibi and WIN can also help steer them towards scale-up financing. Appropriately expand the participation of retail investors.
3/ Recommendations
1. Increase the role of institutional investors like pension funds and insurers in VC, as is the case in the US, by expanding funded pensions. Broaden occupational & private schemes via opt-out design and tax incentives, favour non-guaranteed returns, and build collective funds.
2/ What needs to change?
Access to finance is a key constraint. Banks are not well-equipped to provide risk capital, and European VC funds are much smaller than in the US. Consequently, less VC is available, and later-stage VC financing in 2024 was 84% lower than in the US.
1/ First, what is the problem?
Europe has a formidable research and innovation system, but struggles to produce global tech champions. Over the past 50 years, it has produced only a handful of firms with a market cap > EUR 10 billion, compared to hundreds in the US.
You may have missed it amidst the chaos of the last few days, but there is a new high-level EU report in town: A Franco-German task force led by Jörg Kukies and Christian Noyer presented recommendations to tackle the scale-up financing gap.
Here is what it says and why you should care about it.
1/ This year revealed how the EU's critical raw materials dependence has become an economic security vulnerability. ReSourceEU is the EU’s most serious attempt yet to remedy this. To end the year, I dive into what it does and whether it can shift the trajectory: www.delorscentre.eu/en/publicati...
A Christmas break might do EU doomers some good too.
6/ While difficult trade-offs remain and complementary measures will be needed, for instance, to develop the EU's VC ecosystem, this framework could become a cornerstone for a more integrated, competitive Single Market.
5/ To reach these goals, the 28th Regime should be kept open to all companies, focus on corporate law first, be pragmatic regarding the legal basis and legal instrument, and include attractive features like an online incorporation portal to increase uptake.
4/ I argue that a well-designed 28th Regime would be an effective and actionable way forward to facilitate scaling across the EU and improve companies' access to finance, by simplifying cross-border investments.
3/ While direct harmonization has proven to be difficult, the 28th Regime would create a single EU-wide framework that firms could opt into instead of navigating several national systems, reducing complexity and costs. However, crucial questions about design and implementation remain unresolved.
2/ Small innovative companies face legal fragmentation and bureaucratic hurdles across 27 national systems.
Consequently, they struggle to access sufficient financing and scale their business across borders. Many move abroad, with direct implications for innovation and competitiveness in Europe.
The proposed "28th Regime" is hoped to remove bureaucratic, legal, and financial hurdles that hold back small, innovative EU companies.
However, crucial questions remain wide open. In my new policy brief, I analyse the main options and relevant trade-offs.
1/🧵
www.delorscentre.eu/en/publicati...
Lots to criticise in yesterday’s cars package - but one point deserves credit.
The COM plans to limit support for corporate cars to EVs and tie it to European preferences. Exactly what @lucasguttenberg.bsky.social, @sandertordoir.bsky.social, and I called for and a genuinely meaningful step forward
The Commission’s new Democracy Shield🛡️raised high expectations but proposes mostly additions to existing frameworks rather than attempt innovation.
👇In my new policy brief out today, I analyse the Commission’s newest democracy strategy. 1/🧵
www.delorscentre.eu/en/publicati...
🥐 Das letzte EU to go-Frühstück des Jahres steht an! Am Mi., 17.12. um 8:30 Uhr geht es um das EU-Autopaket und die europäische Autoindustrie. Mit dabei: Unser Co-Direktor @nilsredeker.bsky.social & Senior Policy Fellow @jannikjansen.bsky.social. Jetzt anmelden 👉 www.delorscentre.eu/en/events-at...
White smoke from Berlin: the coalition has agreed to tie new car purchase incentives to European preference rules - and work to align them across the EU.
A very smart move as @sandertordoir.bsky.social, @lucasguttenberg.bsky.social and I have argued here:
www.delorscentre.eu/fileadmin/2_...
