The following is a translation of an article written by the Minister for Regional Development and Public Administration and a researcher at the Europe Strategy Research Institute Tibor Navracsics, originally published on the Five Minutes Europe blog of Ludovika.hu.
The process of European integration has been accompanied since its inception by debate over the desired outcome: a European state or stronger cooperation between European states than has existed to date. Although over the past 70 years, there have been numerous bold plans and ideas for how the European institutional system could finally subjugate the member states that they considered to be outdated, realpolitik developments have so far clearly suggested that European integration will not lead to any unified, truly supranational structure in the foreseeable future.
If you cannot subjugate them, circumvent them—this could be the not-so-new motto of an initiative that the European Commission has not only embraced but, as Ursula von der Leyen’s speech in Davos made clear, has made one of its goals for the future. Recently, an initiative called EU-INC has been calling for the establishment of a 28th pan-European regime that would truly open up the entire European internal market to market participants through a unified set of rules and criteria. This 28th regime would be established alongside the 27 national regimes with the specific aim of unifying the European market, which is still fragmented by national regulations.
The initiators are proposing the creation of a unified pan-European startup system, which would formally be the 28th, but would in fact be superimposed on the 27 existing systems. Supporters mainly come from the European and American tech startup world, for whom one of the fundamental conditions for future competitiveness is whether the European market will be able to compete with the American market in terms of size. This is why they consider it imperative to create a market with uniform regulations.
‘One of the fundamental conditions for future competitiveness is whether the European market will be able to compete with the American market’
The European Commission immediately embraced the initiative and began drafting a policy proposal under the same name, with the aim of creating a unified pan-European company structure. On 20 January, the proposal received majority support in the European Parliament, and on the same day, Ursula von der Leyen officially announced the EU-INC plan. As she put it, if adopted, the proposal will enable entrepreneurs to set up a company anywhere in the EU within 48 hours, with all procedures completed online. The proposal also aims to ensure the free flow of capital. The goal remains for the EU-INC, as the 28th regulatory regime, to provide a truly barrier-free, unified internal market for European startups.
Although the initiators and European Commission officials have lofty ambitions, caution is warranted by the fact that the most important players, the member states, have not yet officially expressed their opinion on the proposal. The European Parliament’s vote is not decisive in this regard, as the EP has always been a loyal ally of the Commission in extending supranationalism. However, the member states are likely to be less enthusiastic, as the planned 28th regime would in fact reduce national jurisdiction.
As a result, the draft, which has been in the works for almost a year, may still have a long way to go. The position of the member states may be strongly influenced not only by their national interests, but also by regional economic or even electoral interests. The delegation of further powers to Brussels, or even the mere possibility of doing so, could trigger domestic political debates.
The EU institutional system is therefore not seeking to subjugate, but to circumvent. The question is how popular this new direction will be among national politicians.
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