Key insights from Draghi's tech-focused discourse:
European Commission Reviews Competitiveness Strategy: Key Points from Mario Draghi's Report
The European Commission recently held a high-level conference to review progress on implementing recommendations for European competitiveness, as outlined in a report by former ECB President, Mario Draghi. Here are some of the key points from his report:
Simplifying EU Law and Regulation
Mario Draghi proposed appointing a new member within the European Commission to simplify EU law and coordinate a new 'evaluation bank' for stress-testing regulations. He also suggested adopting a single methodology to quantify the cost of new legislation.
Telecoms Reform
Though Mario Draghi did not explicitly mention the Digital Networks Act (DNA) in his speech, he alluded to a 'major telecoms reform' expected by the end of the year, likely referring to the DNA. This reform is expected to help improve the EU's digital infrastructure and boost competitiveness in the sector.
GDPR Reform
Draghi criticized the current approach to GDPR reform, which remains focused on easing record-keeping and extending SME derogations to mid-caps. He called for broader reform toward simpler, harmonized rules, noting that the GDPR has raised the cost of data for EU firms by around 20% compared to their American counterparts.
AI Act and Merger Guidelines
Draghi called for a pause on the rules for high-risk systems in the AI Act and urged the Union to expedite the review of merger guidelines, warning that waiting until 2027 to revise merger guidelines is too late, particularly for the EU's telecom sector.
Public Procurement Directive Revisions
Mario Draghi endorsed the revisions to the EU Public Procurement Directives, advocating for the EU to leverage public procurement to support European cloud services and vertical AI. He also proposed a 'Buy European' procurement policy to prioritize domestic suppliers.
Preferential EU Procurement Rules
Work has begun on preferential EU procurement rules for the public sector, but details remain unclear. Potential benefits of these revisions include reserving an EU share in defense chip procurement, supporting European cloud and vertical AI, and setting quotas for clean-tech products.
Competitiveness Compass and Actual Results
The Commission has not provided concrete tables comparing Mario Draghi's outlined proposals, the Competitiveness Compass timelines, and the actual results of this report. However, the focus on measuring the impact of new legislation and improving transparency could significantly improve the EU's competitiveness.
Negotiations and Challenges
The scope of the DNA remains unclear, and negotiations among Member States are expected to be difficult, particularly given the EU-US trade deal restrictions on network fees. The review of merger guidelines is underway, but the industry cannot wait until 2027.
Conclusion
In conclusion, Mario Draghi's report provides a comprehensive overview of the European Commission's strategy for improving competitiveness. By focusing on simplifying EU law, reforming GDPR, expediting telecoms reform, and leveraging public procurement, the Commission aims to boost the EU's competitiveness in the global market. However, challenges remain, particularly in negotiating the details of the DNA and merger guidelines, and ensuring that the benefits of these reforms are equitably distributed among Member States.
