Ireland’s Presidency of the Council of the European Union gives the Government a timely opportunity to influence Europe’s competitiveness agenda.
Ireland should use this period to support practical reform across capital markets, the Single Market, digital policy and decarbonisation writes KPMG’s Conor Holland.
“We have to do everything not to become the museum of the world,” said former President of The European Council Charles Michel. The former Belgian Prime Minister was speaking a few years ago on the risks to the EU of economic stagnation and failing innovation.
Ireland's Presidency of the Council of the European Union provides the Government with a unique opportunity to influence the EU agenda in these key policy and legislative areas – and we must seize it.
Since we joined the EU we have benefited enormously from membership. From the financial contributions made to the development of our infrastructure, to enhanced rights for consumers, and of course through access to the Single Market of 450m citizens.
The recent 10-year anniversary of Brexit is also a timely reminder of the unwavering support provided to us by the EU as we navigated the impacts of Brexit. The EU has been transformative for Ireland, and we need to remain very invested in its continued success.
Ireland assumes the Presidency at a time when Europe is focused on enhancing EU competitiveness. A comprehensive report by former Italian Prime Minister, Mario Draghi, in 2024 was stark – Europe's competitiveness malaise is an existential challenge to our way of life.
His report demonstrated that across many economic metrics, a wide gap has emerged between the EU and the US, driven mainly by a contraction in productivity growth in Europe.
For example, on a per capita basis, real disposable income has grown almost twice as much in the US as in the EU since 2000. The same concern is reflected in recent OECD analysis of EU productivity and the Single Market, which points to weak productivity growth, internal market barriers and fragmented financial markets.
While in recent decades we have also benefited from a globalised, free trade economy with a relatively stable geopolitical landscape, this economic order is no longer, with access to overseas markets for EU companies curtailed, and new technologies emerging rapidly.
The rules of the game have changed, and we must adapt for growth.
Europe faces this new reality with deep structural challenges. Across key industries and technologies, we have been slower to innovate; we have too many cumbersome regulations that place an onerous burden on business; and coordination amongst member states in key policy areas could be better.
With the EU being one of our largest trading partners, clearly the success or failure of the bloc has direct consequences for Ireland.
A buoyant, productive and successful EU is overwhelmingly in our national interest.
It is critical that we use our Presidency to address the EU competitiveness problem. Helpfully, there is a broad consensus around some of the primary solutions to Europe's malaise.
The European Commission’s Competitiveness Compass points in the same direction, with single-market simplification, the Savings and Investments Union, AI adoption and the Clean Industrial Deal all positioned as core competitiveness priorities.
Firstly, Europe needs to rapidly finalise the Savings and Investment Union (SIU), building on the Capital Markets Union, to unlock capital, reduce the administrative burden for companies trading within the bloc, and simplify the complex regulatory regime.
A true European SIU could support the redistribution of capital from bloated savings and deposit accounts into European companies, driving growth and productivity.
We need to remove internal trade barriers arising from the diverging legal systems and protocols across member states to create a true single market that encourages greater levels of cross border investment, and this would clearly benefit Ireland.
As we move deeper into the 'digital first' era, it should be a priority of this Presidency to promote the implementation of policies that enable Europe to develop a competitive advantage in AI and broader digital technologies, including questions of sovereign AI capability.
Europe needs to resist the temptation to overregulate here. A simplified EU Digital rulebook that supports proportionate digital regulation and promotes – not prevents – an environment where European business can innovate, take risk in developing new technologies, and ultimately integrate technology into existing industries would be a significant step in staying competitive.
Finally, the Presidency offers Ireland an opportunity to advance measures that decarbonise our economy and society – a key ambition for both Ireland and the EU, including the EU’s goal of climate neutrality by 2050 under the European Green Deal. As with AI and digital, policies should complement competitiveness – not hinder it.
Recent geopolitical events are likely to expedite the urgency associated with the transition to a low carbon economy, which provides an opportunity for both Irish and broader EU industry.
Again, we have a roadmap of solutions to achieve these climate goals while boosting competitiveness through the EU Clean Industrial Deal (CID), including RD&I funding and strategic plans to stimulate R&D, and a targeted energy affordability action plan.
In summary, the challenge for the EU is not in identifying solutions – it's implementation. This is where Ireland can – and should – play a pivotal role.
We must use the period of our EU Presidency to adopt and implement some of the many policy measures and reforms identified in the Draghi report, and elsewhere.
The Irish Presidency should be clear in its intent to strengthen the Single Market, to decarbonise our economy while boosting productivity, foster innovation in digital technologies, and simplify regulation for business.
We need to be bold, proactive, and forceful in pushing ahead with the necessary measures. Our standards of living as we know them are underpinned by a strong and productive Europe. We cannot afford to stand still. We do not want to become the museum of the world.
For Irish and EU businesses, the policy direction matters. Capital markets reform, digital regulation, Single Market simplification and decarbonisation could all shape investment decisions, operating models and compliance priorities in the years ahead.
The Presidency should therefore be watched not only as a political moment, but as a signal of where European reform may move next.
To discuss how these themes may affect your organisation, submit your proposal to our team of experts.
The EU can become more competitive by unlocking capital, reducing internal trade barriers, simplifying regulation and supporting innovation in AI, digital technologies and clean industry. The priority now is implementation, not the identification of more possible solutions.
EU competitiveness has come under pressure because productivity growth has slowed, innovation has lagged in key industries and businesses continue to face complex regulatory and cross-border barriers. The gap with the US shows why Europe needs to act with greater urgency.
The Savings and Investment Union could help move more capital from savings and deposit accounts into European companies. A deeper and more effective investment market would support growth, productivity and cross-border investment across the bloc.
Decarbonisation can support competitiveness when climate policy encourages investment, innovation and energy affordability. The EU Clean Industrial Deal gives Europe a framework to pursue climate goals while also supporting industry and productivity.
Ireland's Presidency matters because it gives the Government a direct role in shaping the EU agenda at a critical moment for competitiveness reform. Ireland should use that role to push for practical progress on the Single Market, digital policy, capital investment and decarbonisation.
Ireland's EU Presidency will help shape the future direction of Europe.
To discuss how this could impact your organisation, get in touch with Conor Holland; we'd be delighted to hear from you.
