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his minor story speaks volumes about both the necessity and the limits of the European Union. In September 2024, Mario Draghi, the former president of the European Central Bank, sounded an alarm: If Europe did not wake up, it was headed for a "slow [economic] agony." His comprehensive report dissected Europe's lag behind the US and detailed dozens of reforms needed to catch up. Among his many ideas was the creation of a "28th regime" for companies. Currently, a multinational wanting to operate throughout the European Union must legally register in each of the 27 member states, each time under different rules. The French Société anonyme (public limited company) is not the same as the German GmbH or the Italian S.p.A – hence the idea to create a new regime, a 28th that would be recognized across the EU and that would unify the rules (notably bankruptcy laws).
Though only a small part of the Draghi report, this idea points in the right direction. The problem now lies in its implementation. Recently, the European Commission's draft plan leaked; it suggested adopting a directive rather than a regulation. What is the difference? A directive would then have to be transposed onto each of the 27 national legal systems, inevitably leading to differences, whereas a regulation would apply uniformly to all. As one expert on the issue exclaimed, "We'll end up with 27 28th regimes!" The EU risks adding complexity where the goal is to simplify.
