On 29 January 2025, the European Commission adopted its long-anticipated Competitiveness Compass.
The communication “establishes competitiveness as one of the EU’s overarching principles for action” and outlines a roadmap featuring initiatives across several areas.
Regrettably, the whole strategy is based on the assumption that the EU social model needs to be preserved. We rather believe it needs to be rebuilt.
Moreover, while incorporating some of the recommendations from the Draghi report, the Compass does not appear to adopt Draghi’s proposal for new funding approaches to support the multiple transitions ahead.
It also seems that the Commission accepts that the EU should only adapt to competitiveness standards defined outside of Europe, instead of defining its own.
The European Social Model? Only if it Serves Competitiveness…
While the Commission expresses its intent to preserve the EU’s social model, its analysis and justification for action are overwhelmingly focused on meeting companies’ needs. Although the document references “quality jobs” and announces a ‘Quality Jobs Roadmap,’ the social objectives mentioned appear to be framed only in terms of their contribution to boosting competitiveness.
For example, skills development is positioned as a way to enhance competitiveness, good working conditions are linked to attracting workers to the labour market and increasing productivity, while pension reforms are taken for granted.
At the same time, the Commission overlooks the fact that the EU’s social model has been eroded over the past decades. Instead, some of the concrete measures it proposes risk further dismantling what remains of “social Europe.”
The risks of simplification
The communication reiterates the principle recently articulated by Ursula von der Leyen in Davos concerning labour market reforms and “simplification,” which appears to be a concession to demands from business associations.
For instance, rolling back information and consultation rights, due diligence obligations, and reporting requirements on sustainability would hardly strengthen the EU’s social model. Instead, such measures suggest that the EU is willing to compete on the terms set by other global players, potentially lowering standards.
Moreover, simplification could also impact funding instruments, as suggested in the Compass’ section on the new Multiannual Financial Framework (MFF) proposal. This growing concern is particularly relevant among transport stakeholders in Brussels, including the ETF. Simplification could undermine the development of a strong, centrally coordinated European transport funding instrument. Such a tool is essential for prioritising investments with high European added value through long-term, strategic and stable planning under central coordination.
How About Transport?
We look forward to discussing the announced Sustainable Transport Investment Plan, which should encompass all dimensions of sustainable transport. The attention to boost the availability of sustainable fuels is positive, as this is a key element to reach sustainability objectives. We pledge also the introduction of corrective measures that protect European airlines and ports from unfair competition, due to the different environmental requirements applied outside the EU.
The Compass announces a new strategy for European ports and the maritime industry though without further details. We believe such strategy must go beyond competitiveness to protect workers, support European businesses, and ensure a fair and sustainable maritime and logistics environment. Crucially, the European Commission must engage in open dialogue with social partners to ensure that the strategy reflects industry realities and promotes fair, sustainable outcomes.
The Commission follows the suggestion contained in the Letta report on cross-border rail connectivity and the development of an ambitious European high-speed network. The ETF is ready to talk about our views on how to boost cross-border connectivity. While high-speed connections are important to ensure mobility, the EU plans should not lose sight of the local and regional connections, that make up more than 90% of the rail traffic.
As expected, the Clean Industrial Deal is flagged as one of the key actions for the coming months. Its focus appears to be primarily on production, with limited attention paid to collective mobility and freight transport.
The automotive industry is undoubtedly vital for jobs, the economy, and transport in the EU. However, a comprehensive industrial policy must include also a robust transport strategy that addresses infrastructure, planning, and governance.
The Compass also highlights the need to adapt EU competition policies to the evolving landscape, which, the ETF believes, should extend to the transport sector. For a long time, the ETF has argued that transport policies have too often been secondary to internal competition rules. This has disadvantaged those transport sectors facing competition from outside the EU and has hindered decarbonisation by pulling the break on the growth of rail freight and the single wagon load transport in particular. Conditionalities and democratic governance should be central in the discussions around competition policies and state aid.
