2025 for competitiveness, 2030 for defense: leaders set reform timeline

Brussels – Continue with the legislative reforms needed to revitalize Europe’s productive fabric and meet competitiveness needs, including in the defense sector. EU heads of state and government reached a political agreement on what essentially takes the form of a work program, first and foremost, for the current year. 2025 will be the year of regulatory simplification that will be useful for reviving production and industry. In the conclusions approved by the 27 member states, there is a call to end within the year “as a priority issue,” the work begun with the proposed Omnibus package, with which the EU Commission intends to implement the Competitiveness Compass.

In this context, there is a call to proceed “by June” to amend the rules to impose a stop to corporate reporting obligations and to reduce bureaucratic and administrative burdens by at least 25 percent for enterprises and up to 35 percent for small and medium-sized enterprises (SMEs). In doing so, “we will make things easier for all businesses in our economic space,” summed up a satisfied European Council president, Antonio Costa, at the end of the proceedings, “so today, we moved forward with simplification.”

Forward with defense, aiming to be ready in 2030

If the time horizon is immediate for competitiveness, for a true European defense, the goal is 2030. Leaders are calling for “acceleration of work on all strands to decisively ramp up Europe’s defense readiness within the next five years” starting now, that is, with the Commission’s proposals – The EU ReArm plan and White Paper on the Future of Defense – and the conclusions of the March 6 leaders’ summit.

Specifically, it means immediately starting to work on the production of everything needed to increase capability in terms of air and missile defense, artillery systems (including deep precision strike capabilities, missiles and ammunition, drones and anti-drone systems, military mobility, cyber security, artificial intelligence, and electronic warfare. These are the priorities the European Commission identified. 

The real crux remains financing. For now, the ‘no’ to new Eurobonds remains firm. That is why the Commission is invited to “consider further use of EU programs” and, specifically, to explore the option of InvestEU, the EU investment program. On the one hand, this invitation confirms the German-Dutch stance, and on the other, the Italian proposal as put forward by Economy Minister Giancarlo Giorgetti.

Meloni between satisfaction and doubts

“The conclusions refer to Italy’s proposal for the use of InvestEU to finance defense,” Prime Minister Giorgia Meloni stressed, adding that she is satisfied with the progress and even more so the conclusion of the work. She points out that on competitiveness, “for the first time, there is a reference to the concept of technological neutrality,  which Italy advocated” from the outset. The issue here is of alternative fuels instead of traditional ones powering engines, with the government trying to allow the use of bio-fuels, on which Italy has much to say, in addition to synthetic fuels (e-fuels) dear to the Germans.

 Meloni, however, does not hide some doubts on defense and precisely the possibility of activating by next month the clauses that allow the suspension of the domestic stability pact – the national one, not the European one – to allow public defense spending. “The April deadline seems a bit tight,” she acknowledged. “We should allow a little more time” for the appropriate evaluations and decisions. Italy, however, remains firm in its position to try to avoid new public debt.”