The Transformation of the Economy Cannot Be Regulated into Existence

Today, the European Union launched the “Clean Industrial Deal” and the “Omnibus” procedure, signaling a new approach to industrial policy. The German Chemical Industry Association (VCI) sees positive signals in the new European Commission’s economic policy plans. The focus on competitiveness, energy prices, and reducing bureaucracy is seen as both the right direction and a much-needed correction after decades of missteps. VCI’s CEO, Wolfgang Große Entrup, comments: “The EU Commission finally has the right compass in hand. The crucial point is that the EU must now steer its ship full steam ahead in the right direction and not veer off course after just a few meters.”

The VCI is convinced that Europe must reinvent itself and return to its strengths: the power of the single market, its diverse research landscape, and above all, its innovative industrial base. According to the industry association, while the EU’s previous approach often became a straitjacket of bureaucracy and regulations for businesses, the EU has laid a strong foundation for change today. “The transformation of the economy cannot be regulated into existence, just as little as Europe’s powerful comeback on global markets,” says Große Entrup.

The “Clean Industrial Deal” outlines concrete actions to turn decarbonization into a growth driver for European industries. This includes lowering energy prices, creating quality jobs, and providing the right conditions for companies to thrive. The proposal emphasizes further expansion of renewable energy, innovative ideas for grids and flexibility, and views the circular economy as key to industrial competitiveness. It also welcomes socially equitable transformation measures, such as social leasing for electric cars and heat pumps. However, critics say that convincing financing solutions are lacking. All these measures will require time and considerable national policy efforts to be effective. Other mistakes, according to VCI, still need to be corrected, such as the rigid regulations on hydrogen, which hinder its broad deployment and undermine the goal of rapidly building a hydrogen economy.

With the “Omnibus” procedure, the EU aims to reduce bureaucracy. According to the VCI, this is the right direction but the path to achieving this is far too complicated. The extensive regulations on sustainability reporting (CSRD) and the EU supply chain law (CS3D) particularly overwhelm small and medium-sized enterprises. What is needed now are changes that reduce bureaucracy without sacrificing the protection of human rights, the environment, and sustainable corporate evaluations.