A Competitiveness Compass for the EU: a roadmap for simplification and financial markets integration

Among these initiatives, simplification is presented as a fundamental requirement to enhance EU competitiveness. In fact, the Compass envisions a proposal for a series of Simplification Omnibus packages, the first of which will be released later this month and is meant to provide concrete actions to reduce regulatory burdens and red tape in the fields of sustainable finance reporting, due diligence and taxonomy. It is also mentioned that digital tools and AI will play a key role in powering streamlining efforts, through initiatives such as the European business wallet. Although the precise content of the Simplification Omnibus remains unclear, stakeholders eagerly await its release, hoping that the proposal will finally address the industry’s long-standing concerns about excessive regulatory complexity.

Another key pillar of the Compass is the creation of a Savings and Investments Union (SIU). The project aims to channel savings into productive investments in Europe’s private capital markets, ultimately unlocking new sources of financing for the EU’s strategic priorities.

Within this initiative, the Competitiveness Compass outlines several proposals for the financial services sector. These include the promotion of low-cost savings and investment products at EU level, measures for a more unified supervision, the removal of barriers to consolidation of infrastructure, the revival of the securitisation market in Europe and the harmonisation of insolvency frameworks to create a level playing field across the EU. The initiative also calls for the enhancement of private and occupational pensions and the removal of taxation barriers to cross-border investment. The Commission launched a public call for evidence last Monday, intended to collect feedback from stakeholders on the progress made so far and the remaining challenges for the SIU. While the industry has the opportunity to provide its input for the drafting of the SIU Strategy, it will need to wait until mid-March for further details on the specific proposals.

The Competitiveness Compass sets a preliminary direction for simplification efforts and for the development of a Savings and Investments Union. The EU financial services sector will now have to wait to see how and when the proposed initiatives will take shape.