The EU cannot afford to delay restoring its competitiveness

Without radical change, we risk becoming economically irrelevant

The European economy is at a critical juncture. As Europe’s competitive position continues to erode, fundamental reforms remain absent. The European Commission recently unveiled its Competitiveness The extent to which companies in one country can compete with similar companies in another country. A law came into force in Belgium in 1996 to monitor competitiveness. This stipulates that Belgian salaries may not evolve faster than the average of those in the three neighbouring countries. The Central Economic Council (CEC) performs an annual measurement to see if the objectives have been obtained. Competitiveness Compass, a strategic framework aimed at strengthening the European economy. This week, the European Parliament is debating the plans. While the initiative signals good intentions, the N-VA delegation in the European Parliament is calling for faster, deeper, and more effective measures. According to Johan Van Overtveldt, delegation leader and chair of the Budget Committee, and Kris Van Dijck, MEP and member of the Committee on Industry, Research, and Energy, the EU must move beyond plans and analysis and take real action.

We don’t need a roadmap, we need a turbo engine

The numbers are telling: in Flanders, bankruptcies rose by 5.5% in 2024, and one in three SMEs is facing financial difficulties. “Our competitiveness is shrinking every day. The world is pulling ahead while we are busy studying a compass? We have already lost too much time—we need to make up for it,” said Kris Van Dijck.

He is calling for fewer regulations and greater trust in entrepreneurs: “Give businesses the breathing space to compete instead of suffocating them with excessive regulation. What we need is a single market with fair competition and effective enforcement.” Van Dijck also stresses the importance of technology neutrality: “Innovation is being stifled by ideological choices. The EU must promote innovation without political dogma.” Additionally, he argues for stronger cooperation while respecting national diversity: “The EU must collaborate more closely in energy, transport, and capital markets. But Flanders is not Poland. Legislation must respect national realities.”

Innovation is key, but Europe lacks execution power

Johan Van Overtveldt focuses on the structural issue behind Europe’s declining competitiveness: the innovation gap with the U.S. and China. “Europe is structurally lagging in disruptive innovation. We invest as much in R&D as the U.S., but our efforts are too fragmented and inefficient.” He highlights a fundamental difference: “In the U.S., innovation is driven by independent top scientists within flexible structures like the Advanced Research Projects Agencies (ARPAs). Europe has nothing comparable. We lack speed, focus, and execution power.”

Van Overtveldt also points to another issue: insufficient private investment in high-tech sectors. “In the U.S., 90% of private R&D investment flows into sectors like AI and biotech. In Europe, it’s less than half. We urgently need to improve access to capital and support start-ups. Europe must abandon its risk-averse mindset and embrace creative destruction: for innovation to thrive, capital and labor must be able to move freely. We need to reform labor markets, modernize legislation, and eliminate bureaucratic barriers.”

Competitiveness fund must not become a money pit

The N-VA delegation remains skeptical about the proposed Competitiveness Fund. Van Overtveldt warns: “There’s talk of a €500 billion fund, similar to the Recovery and Resilience Fund. But without clear oversight, this money risks flowing primarily to large, well-established corporations and lobby groups, instead of the innovative start-ups that Europe truly needs.”

Van Dijck adds: “Money alone is not the solution. We need structural reforms. Without a coherent strategy, this fund will become just another symbolic measure.” Van Overtveldt concludes: “Europe no longer has the luxury of delay. Without radical change, we risk becoming economically irrelevant.”

Key takeaways: N-VA’s vision for restoring the EU’s competitiveness

• Fast-track technology neutrality – Innovation must not be hindered by political ideology.
• More trust in entrepreneurs – Reduce regulatory pressure and improve enforcement.
• A real single market – Focus on energy, transport, and capital markets.
• A targeted innovation strategy – Establish a European equivalent of the U.S. ARPA model and increase private investment in high-tech.
• Flexible labor and capital markets – Enable innovation and economic growth.