The European Commission’s drive to cut corporate red tape partly rests on a competitiveness narrative that is not supported by its own evidence, according to experts and data from the European Investment Bank.
They show that in fact US companies report greater regulatory obstacles to investment than their European counterparts.
Europe’s alleged competitiveness gap with the United States and China has become a defining theme in Brussels policymaking. This was the bottom line in the 2024 Letta report on the internal market and the 2025 Draghi report titled The Future of European Competitiveness.
“The problem is not that Europe lacks ideas or ambition. We have many talented researchers and entrepreneurs filing patents. But innovation is blocked at the next stage: we are failing to translate innovation into commercialisation, and innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations,” reads the Draghi report.
Red tape, meaning unnecessary and burdensome regulations, has been cited as the major source of the problems for European companies.
