Julie Linn Teigland / Feb 2025
Mario Draghi and Ursula von der Leyen. Photo: Shutterstock
There is no doubt that the EU is facing some of the most complex challenges in its history. Geopolitical disruption and volatility are on the rise. A host of forces are at play including climate change, the rise of artificial intelligence (AI), and shifting demographics, all of which leads to a highly uncertain outlook.
When disruption was less frequent, Europe could afford to take its time debating how to respond. Not anymore. I am convinced that it is time for a new approach in Europe, embracing change with a positive mindset and moving forward with confidence.
Europe understands the importance of collaboration, and policy makers and businesses need to share responsibility to be part of the solution. Action must be collective, and it must be decisive, in order to shape the future, rather than be shaped by it.
I’ve identified five priorities that should drive the EU agenda, building from the Draghi report, which suggested urgent measures that Europe must take to re-establish itself on the world stage, and highlighted before that in our recent 2024 EY Europe Attractiveness Survey.
- Unlocking the EU’s competitiveness
Competitiveness should be the cornerstone of EU policy. That means framing the digital and green transitions in terms of competitive advantage, not regulatory burden. The costs of doing business need to be actively managed and private investment unlocked with the Capital Markets Union, or Draghi’s simplified and rebranded Savings and Investments Union. Tax policies also need a makeover, and it is essential to protect and expand the single market, fight financial crime and ensuring trust and fair play for businesses.
- Boosting international trade and investment
We know the next five years will see a shifting, complicated geopolitical environment. While the EU seeks strategic autonomy, building redefined trading partnerships will be critical and investment is needed. That means developing sustainable practices and free trade agreements and furthering digital transformation.
The EU must streamline complex regulation as well as continue to support efforts towards the effective settlement of disputes, through reform of the World Trade Organization.
There should also be focus on syncing supply chains and customs codes, all while keeping the private sector in the loop. This will help create a bold blueprint for a thriving, equitable trading future.
- Driving the digital transition
The development and use of AI and digital technology is accelerating, bringing with it new opportunities and new risks.
The EU has led the way in regulating the digital space—but the US leads in investment and DeepSeek demonstrates China’s innovation and highlights what can be done even without access to US levels of finance.
The EU's digital playbook should be clear: safety, innovation, and standards are essential. Protecting citizens is non-negotiable, but it’s also important not to stifle creativity.
A balanced approach to governance will promote innovation; while also mitigating risks. The EU must be a magnet for bright minds, taking the lead on shaping shared ethical standards while ensuring open doors for business worldwide.
And of course, cyber threats required constant vigilance and must be met with unified defences, shared intelligence and informed citizens.
- Aligning prosperity with sustainability goals
Europe is on the brink of a sustainability revolution: it is leading the way, and the world is watching. But we need a change in language, with a focus on sustainability’s economic benefits.
Businesses and the public sector need to drive forward together, cutting emissions in half by 2030 and using precious resources much more efficiently. The focus should be on sustainable finance, a sustainable supply chain, cleaner cities and the green energy transition, meeting the expectations of consumers and ensuring resilience.
Governments must provide incentives to make the right choice an easy one and regulation needs to be streamlined. The EU taxonomy needs to be demystified, and sustainability reporting must be crystal clear about its purpose with simplified rules and reduced red tape.
- Committing to skills and talent
Equipping the workforce with the right skills for a greener digital future is an absolute imperative and Europe outperforms competitors in relation to the availability of technology skills.
Part of that will mean equipping young people with a multifaceted education that includes sustainability skills and emerging tech but equally critical are life skills like adaptability, resilience, and the ability to learn, unlearn, and relearn rapidly.
One way to achieve that would be to introduce European Skills Badges, talent passports, that can be learned in a classroom or on the job. This would help build a workforce that's ready for anything and recognized everywhere.
Europe faces distinct challenges, from navigating geopolitical tensions to coordinating efforts across multiple countries, and these challenges need to be met head-on.
Now is the time for bold leadership and the resolve to shape the future with confidence. There is a powerful and resolute message to convey: Europe is open for business and its brightest days are yet to come.
The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organisation or its member firms.
