20 February 2025 | By Marten Männis
The EU
A bolder, simpler, and faster EU for 2025
On 11 February 2025, the European Commission put forward their annual work programme, establishing their policy and legislative initiatives it aims to achieve. This will be used as a basis to collectively, between the institutions, establish a Joint Declaration on the EU’s legislative priorities for 2025. It should also be noted that ongoing Treaty enforcement and routine initiatives, core Commission competences, are not covered by this programme.
The keywords for 2025 are strength and unity. Europe stands at a crossroads, facing an era of profound instability and high expectations, with combined societal, financial, energy-related, and geopolitical challenges all intertwined. This combination of interrelated challenges requires the EU to become leaner and more precise in addressing this complex combination, since the choices made will shape the continent for decades and will effectively establish whether the EU retains its soft-power globally or not.
Key challenges include increasing economic competition, high energy costs, labour shortages, and the need to accelerate climate action, all of this at the backdrop of global geopolitical uncertainty and climate change. Businesses and citizens alike are calling for simpler regulations and faster decision-making to maintain Europe’s global competitiveness. Meanwhile, geopolitical instability—exacerbated by Russia’s war in Ukraine—has reshaped security concerns, while migration and climate change continue to test the resilience of European societies.
The Commission aims to remove structural barriers, boost investment in key priorities, and ensure a socially fair Europe. Strengthening democracy, safeguarding European values, and preparing for the Union’s expansion are also central to its agenda. As the world grows more uncertain, a strong, united Europe is essential to securing a prosperous and stable future for all its citizens.
The programme aims to simplify rules, in particular those concerning SMEs, with the targets being to reduce administrative burdens overall by at least 25% and those affecting SMEs by at least 35%. The Draghi report is used as momentum to push forward stronger changes. Additionally, another short-term goal is to simplify investment opportunities in Europe, particularly through the implementation of the InvestEU programme and the European Fund for strategic investments, that aim to, among other things, simplify reporting requirements. Furthermore, in the European Competitiveness Compass, the commission acknowledges that the current European standardisation lacks responsiveness concerning faster innovation cycles in emerging technologies.
Under Section 3.1 of the work programme, most of the competitiveness-related objectives are laid out. Those are set in line with the EU Competitiveness Compass, with the Single Market Strategy being at the centre of the policy goals. The fields prioritised are: start-ups and scale-ups; industries in conjunction with climate-policy related targets; post-Russia energy objectives; a revision of REACH and addressing ‘forever chemicals’; the Savings and Investment Union; climate change; life sciences; transport; digital infrastructure; AI; and space operations.
Increase trade between Member States
Per the Competitiveness Compass, the share of EU GDP represented by trade between Member States decreased both for goods and for services. This requires expanding and removing barriers within the Single Market to boost competitiveness that can be achieved by increasing market access, lowering energy costs, and improving overall efficiency. A proposed Horizontal Single Market Strategy aims to modernise governance, eliminate intra-EU obstacles, and prevent new ones, ensuring better collaboration with Member States. The Compass also establishes a reinforced Single Market Enforcement Taskforce (SMET) to oversee the smooth implementation of EU regulations, reducing unnecessary burdens and promoting harmonisation.
Invest in Europe
The Savings Investment Union and the financing of competitiveness also remains a key point of emphasis. The EU faces substantial financing needs to meet its ambitious goals in innovation, climate transition, defence, and digital infrastructure. Achieving these targets requires an additional €750-800 billion per year by 2030, pushing investment levels back to those last seen in the 50 years ago. Mobilising both public and private investment is essential.
A major challenge is the EU’s over-reliance on bank debt financing, while €300 billion in European savings flows into markets outside the EU each year. This reflects the stock market index values, when comparing the returns of broader European funds to those of American companies, since the EU’s household savings rates are notably higher than those of American citizens. To address this, the Commission will propose a Strategy on a Savings and Investments Union in 2025, aiming to deepen capital markets, encourage risk-taking, and direct private investment toward growth sectors. Measures will also focus on boosting private pensions, removing barriers to cross-border investment, and expanding the EU’s securitisation market to support SME lending.
Public investment will remain crucial, with strategic financial coordination among Member States to prioritise EU-wide economic growth. The revised Economic Governance Framework aims to balance debt sustainability with necessary public spending, providing more flexible fiscal paths for Member States. Strengthening national ownership of investment strategies and improving enforcement mechanisms will be key to ensuring long-term financial stability and economic prosperity.
Climate change specific reduction targets remain a key objective in 2025, with the European Climate Law related targets, such as a 90% emission-reduction target for 2040 being considered in industry-related initiatives, such as the Clean Industrial Deal.
Additionally, life science related innovation is highly prioritised, with AI-related convergence remaining crucial in ensuring that the goals set forth in the Bioeconomy Strategy can enable Europe to reach a truly circular and sustainable production process for all types of resources.
An intriguing proposal that arose from the EU Competitiveness Compass concerns the European business wallet. Built on the EU e-IDAS framework, the aim is to enable companies to have a digital platform for interacting with all public administrators. Currently, no more information is available, however this does seem like a measure that companies of all sizes should welcome.
Overall, the 2025 work programme is highly ambitious and wide-reaching. While the Draghi report has generated discussion and positioned the Commission to put forward lofty targets, the challenges that Europe currently faces are truly complex and multifaceted. Additionally, the fact that Europe has, since the Great Recession, always had to address extremely at least one Union-wide crisis on an ongoing and rotational basis, means that, while the EU has gained excellent experience in Union-wide responses over the last 20 years, one might worry that it could run out of steam, making the current package of issues truly existential. Europe successfully coordinated COVID-19 and it was very successful in transforming its energy infrastructure in such a short amount of time, especially just as the pandemic started to wind down, with inflationary issues arising from both crises and as military-related objectives towards Ukraine rose. Fortunately, it does seem that most of Europe is unified in the challenges that await and that this uniformity can enable the EU to be truly strong. Hopefully, we will consider the EU soon to be bolder, simpler, and faster than ever before.
