How Europe can COMPETE

I was in Cluj again last week. It’s one of my favourite cities – a university town, full of ideas, traditions and rich in history. One way or another, Cluj has always found its way to the forefront of innovation and industry in each of the eight centuries since its first mention in the historical records in 1213.

That’s particularly true today. Cluj is now one of at least four centres of a rapidly expanding IT industry in Romania. Whereas in the past Cluj might have been famous for its engineering plant or its shoe factory, today it is the website factory of Europe. The URLs for major banks in the City of London, football clubs in the English Premier League, big multinationals in the US are all being built by talented young engineers in Cluj. They are constructing the digital single market, where a new shop opens every day.

According to a new study published by leading British businesses this week, the digital single market has the potential to boost the EU’s GDP by 4%. That is provided that we can reduce the barriers to making transactions across the EU online. It’s still too cumbersome to buy from a website in another EU Member State, even if it might offer a better price or a better product. And while small businesses can be hugely successful online, with smart use of social media a good match for the big corporates’ advertising budgets, they still suffer from too much regulation – both at the national and European level.

EU leaders have an opportunity to put this right at the European Council meeting on 24-25 October. It will be discussing just these issues – how to reduce regulation and open up the digital single market, especially for the smallest companies. British businesses are proposing a new ‘common sense filter’ for all new proposals – the COMPETE Principles. No new EU legislation should be brought forward which does not successfully pass through these seven tests.

Competitiveness test

One-in, One-out

Measure impacts

Proportionate rules

Exemptions and lighter regimes

Target for burden reduction

Evaluate and Enforce

The Single Market is a huge asset for the EU, a real point of competitiveness compared with the new growing markets further east. To get the most out of it, it needs to be modern and efficient – fit for business in an on-line world. As digital commerce develops, I have no doubt that cities like Cluj – and others like it in Romania such as Timisoara, Bucharest and Iasi – will be leading the way in constructing the Single Market of the future.