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The economic and technological developments in the last election period have made it very clear to us in Europe that we will not be able to defend our way of life and our democracy if our economy does not become stronger. This is especially true with the prospect of Donald Trump becoming president again and leading the USA into an uncertain future.
Europe’s economy must become more innovative and competitive. No one is likely to disagree with that. There are, of course, many opinions on how this can be achieved. Do we need European champions who can compete on an equal footing with the really big players from the USA or China? Or are the many small and medium-sized specialists, who can do what no one else can, our competitive advantage? We probably need both.
But one thing always applies: For our companies to become more competitive, we need a single internal market that offers attractive conditions. If you have to meet different requirements in every member state, your business will not progress. This is not a new insight, but unfortunately the reality is still different. It is therefore not trivial who will be the new Competition Commissioner in the new Commission. Till Hoppe explains the details.
And what we always need, alongside clever politicians and courageous entrepreneurs, are resourceful IT experts and lawyers. Like those from the Stuttgart Chamber of Industry and Commerce, who have developed an AI tool to reduce bureaucracy.
We wish you every success in overcoming mental barriers and bureaucratic hurdles!
It’s only a few sentences, but they were enough to set the world of competition watchdogs on edge: “I believe that we need a new approach to competition policy“, writes Ursula von der Leyen in her political guidelines for her second term of office. This must be “better aligned with our common goals” and provide “stronger support” to companies that want to expand on global markets.
It seems that the Commission President is siding with Germany, France, and a number of industry representatives: At least since the rail merger between Siemens and Alstom was prohibited in 2019, Berlin and Paris have been pushing for the standards of merger control to be relaxed to allow the emergence of globally competitive large companies.
At their Council of Ministers at the end of May, both governments called for a review of European competition rules and practices to see whether they “allow consortia formation and consolidation in key sectors (e.g. mobile networks, aviation) to strengthen European resilience“.
Many smaller member states have been resisting such relaxations for just as long. They fear that large corporations from the big countries will dominate their markets. For von der Leyen, wanting to change the legal basis of the Merger Regulation would therefore have little chance of success. This is because it would require unanimity in the Council. “However, it will be difficult to explain to Denmark or the Netherlands why they should abandon the fine balance of interests in favor of large companies from other member states”, says Andreas Schwab, the EPP Group’s spokesperson for internal market policy.
But von der Leyen has another lever: In the coming weeks, she will decide who she wants to appoint as the new Competition Commissioner, one of the most powerful posts in her new college. Margrethe Vestager of Denmark had defended herself doggedly against the many attempts by her French colleague Thierry Breton to relax the supervisory standards.
But Vestager’s ten-year term ends in the fall. Who von der Leyen will appoint as his successor is a matter of speculation at best. The only thing that seems clear is that it will not be Breton (or another candidate from Paris). Customs prohibit the appointment of a competition commissioner from the large states of Germany and France.
In any case, there is much to suggest that it will be more about gradual adjustments in the practice of merger control than revolutionary reforms:
The political discussion focuses primarily on two sectors: aviation and telecommunications. In aviation, large providers such as Lufthansa, Air France-KLM and IAG are pursuing a strategy of strengthening themselves by taking over smaller rivals in order to compete with low-cost airlines or larger competitors from the USA or the Gulf States.
However, the Commission takes a critical view of the consolidation, as prices rose in many cases and the number of flights fell as a result. Lufthansa’s takeover of Italy’s ITA was only approved after extensive scrutiny and subject to strict conditions. The purchase of the Spanish Air Europa by IAG is on the brink because of the authority’s demands.
The airlines often have the backing of their domestic governments for their expansion plans, as they see strategic value in them. Berlin and Rome, for example, campaigned for the Commission to approve the Lufthansa-ITA deal despite their reservations. The takeover is an example of “how a takeover was approved under political pressure that should actually have been prohibited from a competition perspective“, criticizes Tomaso Duso, head of department at the German Institute for Economic Research and member of the German Monopolies Commission.
The major telecommunications companies are in turn pushing for greater consolidation in the national markets. Until now, the Commission has prohibited takeovers of mobile phone companies if this would reduce the number of providers in a country to fewer than four. Deutsche Telekom CEO Tim Höttges and other CEOs argue that the high price pressure is robbing companies of the air they need to invest in upgrading their networks.
Former Italian Prime Minister Enrico Letta partially shared this view in his report on the Single Market: He sees the “need for a certain degree of consolidation within national markets” given the scale of investment required in new technologies such as edge/cloud or 6G.
However, Letta’s focus is on breaking down the boundaries of today’s largely nationally organized markets. Mergers could then create “cross-border operators of a European dimension“.
CDU MEP Andreas Schwab argues similarly: “We should now create a genuine European single market for telecommunications services in which companies can leverage synergies.” In a large single market, larger players could also be permitted without increasing prices for consumers.
DIW expert Tomaso Duso argues that telecommunications companies are actually seeking more market power in their domestic markets in order to be able to raise prices. The companies could easily merge across borders, “the argument that strict merger control would prevent big players is a masterpiece of lobbying by the telecoms groups“.
The economist fears that the beneficiaries of looser supervision will hijack the current debate on Europe’s competitiveness problems. “We should not draw the wrong conclusions from this: Competition in the domestic market is the foundation for global competitiveness.” What is needed is a targeted European industrial policy – “and not one that distributes money to large companies with good political contacts”.
The highest European court has strengthened the protection of wolves in Spain. The judges of the European Court of Justice (ECJ) ruled that if the condition of the animals is poor at a national level, hunting should not simply be allowed in individual regions where wolves are slightly better off. An assessment of whether a population is in good condition must always be carried out “at the level of the biogeographical region or even across borders”, the Court stated.
As soon as an animal species is in an unfavorable conservation status, the competent authorities must take measures to ensure that the population is well in the future. The Luxembourg-based court also ruled that a regional law allowing wolves to be hunted in a certain region of Spain was in breach of EU law.
In Spain, wolves are subject to different protection regulations: Wolves south of the River Duero in northern Spain are strictly protected, so hunting them is generally prohibited. North of the river, a regional law reportedly permitted the hunting of the animals under certain conditions in 2019.
At the beginning of the 1970s, wolves were almost extinct in Spain. After the animals were placed under protection in the hunting law, the populations slowly recovered. A census in 1986-1988 recorded 294 packs. In a second census in 2012-2014, there were barely any more, 297 packs with a total of around 2,800 animals.
According to a report by state TV station RTVE, scientists have found that wolf populations have not recovered as well as in some other European countries. The development of the population was described as “unfavorable”. One of the reasons could be a dramatically shrunken gene pool as a result of the low number of animals and their spatial isolation. The wolves’ chances of survival have also decreased due to climate change and environmental pollution. dpa
The frustration is great. For years, companies have been promised a reduction in bureaucracy – but nothing has happened. On the contrary: politicians are constantly coming up with new projects, whether at state, federal or European level.
The result is reflected in a recent IHK survey. On a scale of one to ten, companies currently rate the burden of bureaucracy at 7.8, compared to 5.3 in 2019. A look towards Europe also confirms this: 95% of companies in the southwest say that the new EU Commission needs to tackle bureaucracy reduction with vigor. 85% believe that the flood of red tape significantly weakens the attractiveness of Europe as a business location.
An alarm signal for us and time to act. We were looking for a way to get away from the small details and develop systematic approaches. A discussion among colleagues – between the IT department and the legal department – gave rise to the idea of using AI for our purposes. We launched a bureaucracy check and asked our member companies to use the email address buerokratieabbau(at)stuttgart.ihk.de to report the examples from their day-to-day work where bureaucracy slows them down the most.
The majority of examples are small-scale statistical and reporting obligations as well as formal requirements. In addition, companies suffer from long and complex approval procedures and thus from poorly digitized and understaffed administrations.
So far, many hundreds of reports on bureaucratic burdens have been received. These are entered into an AI-based tool that is fed exclusively by us. In addition, our legal experts have collected, categorized and uploaded around 700 documents from all possible sources and used another AI to search through around 6300 individual standards from Baden-Württemberg state law.
The results are:
The next step is to target all application and approval procedures. The flood of legislation at the federal and EU level is also on our agenda and could be searched using our tool.
Our AI processes all the data entered, clusters it and our team uses it to develop solutions that can be adopted by the various legislators as overarching guidelines. Our specific proposals include, for example, generally doubling the threshold values for laws, such as the number of employees above which a regulation should apply.
In addition, it should be possible to fulfill any obligation to provide evidence, reporting or documentation by submitting a self-declaration; checks are carried out on a random basis. Each permit is deemed to have been granted if the competent authority has not decided on the application within eight weeks.
The same applies to the documents: they are deemed to be complete if the competent authority has not requested additional documents within four weeks. And if a written form is required anyway, it should also be possible in the future to submit it as an electronic declaration. We move many thousands of euros back and forth through online banking, but communication with an authority is not possible electronically?
The state of Baden-Württemberg has expressed interest in our AI tool. The relief alliance of politicians and associations launched by the state has issued a public call via the Ministry of Economic Affairs to report examples to us. We are already providing the relief alliance with specific examples of bureaucratic burdens in state law. Federal politicians have also become aware of our tool and have contacted the IHK.
Politicians can no longer ignore companies’ calls for relief. Our initial proposals are on the table. We are convinced that reducing bureaucracy is possible if it is wanted. The ball is now in the politicians’ court. But we will not give up until the 180-degree turnaround is initiated.
Claus Paal is the President of the IHK Stuttgart Region.
The economic and technological developments in the last election period have made it very clear to us in Europe that we will not be able to defend our way of life and our democracy if our economy does not become stronger. This is especially true with the prospect of Donald Trump becoming president again and leading the USA into an uncertain future.
Europe’s economy must become more innovative and competitive. No one is likely to disagree with that. There are, of course, many opinions on how this can be achieved. Do we need European champions who can compete on an equal footing with the really big players from the USA or China? Or are the many small and medium-sized specialists, who can do what no one else can, our competitive advantage? We probably need both.
But one thing always applies: For our companies to become more competitive, we need a single internal market that offers attractive conditions. If you have to meet different requirements in every member state, your business will not progress. This is not a new insight, but unfortunately the reality is still different. It is therefore not trivial who will be the new Competition Commissioner in the new Commission. Till Hoppe explains the details.
And what we always need, alongside clever politicians and courageous entrepreneurs, are resourceful IT experts and lawyers. Like those from the Stuttgart Chamber of Industry and Commerce, who have developed an AI tool to reduce bureaucracy.
We wish you every success in overcoming mental barriers and bureaucratic hurdles!
It’s only a few sentences, but they were enough to set the world of competition watchdogs on edge: “I believe that we need a new approach to competition policy“, writes Ursula von der Leyen in her political guidelines for her second term of office. This must be “better aligned with our common goals” and provide “stronger support” to companies that want to expand on global markets.
It seems that the Commission President is siding with Germany, France, and a number of industry representatives: At least since the rail merger between Siemens and Alstom was prohibited in 2019, Berlin and Paris have been pushing for the standards of merger control to be relaxed to allow the emergence of globally competitive large companies.
At their Council of Ministers at the end of May, both governments called for a review of European competition rules and practices to see whether they “allow consortia formation and consolidation in key sectors (e.g. mobile networks, aviation) to strengthen European resilience“.
Many smaller member states have been resisting such relaxations for just as long. They fear that large corporations from the big countries will dominate their markets. For von der Leyen, wanting to change the legal basis of the Merger Regulation would therefore have little chance of success. This is because it would require unanimity in the Council. “However, it will be difficult to explain to Denmark or the Netherlands why they should abandon the fine balance of interests in favor of large companies from other member states”, says Andreas Schwab, the EPP Group’s spokesperson for internal market policy.
But von der Leyen has another lever: In the coming weeks, she will decide who she wants to appoint as the new Competition Commissioner, one of the most powerful posts in her new college. Margrethe Vestager of Denmark had defended herself doggedly against the many attempts by her French colleague Thierry Breton to relax the supervisory standards.
But Vestager’s ten-year term ends in the fall. Who von der Leyen will appoint as his successor is a matter of speculation at best. The only thing that seems clear is that it will not be Breton (or another candidate from Paris). Customs prohibit the appointment of a competition commissioner from the large states of Germany and France.
In any case, there is much to suggest that it will be more about gradual adjustments in the practice of merger control than revolutionary reforms:
The political discussion focuses primarily on two sectors: aviation and telecommunications. In aviation, large providers such as Lufthansa, Air France-KLM and IAG are pursuing a strategy of strengthening themselves by taking over smaller rivals in order to compete with low-cost airlines or larger competitors from the USA or the Gulf States.
However, the Commission takes a critical view of the consolidation, as prices rose in many cases and the number of flights fell as a result. Lufthansa’s takeover of Italy’s ITA was only approved after extensive scrutiny and subject to strict conditions. The purchase of the Spanish Air Europa by IAG is on the brink because of the authority’s demands.
The airlines often have the backing of their domestic governments for their expansion plans, as they see strategic value in them. Berlin and Rome, for example, campaigned for the Commission to approve the Lufthansa-ITA deal despite their reservations. The takeover is an example of “how a takeover was approved under political pressure that should actually have been prohibited from a competition perspective“, criticizes Tomaso Duso, head of department at the German Institute for Economic Research and member of the German Monopolies Commission.
The major telecommunications companies are in turn pushing for greater consolidation in the national markets. Until now, the Commission has prohibited takeovers of mobile phone companies if this would reduce the number of providers in a country to fewer than four. Deutsche Telekom CEO Tim Höttges and other CEOs argue that the high price pressure is robbing companies of the air they need to invest in upgrading their networks.
Former Italian Prime Minister Enrico Letta partially shared this view in his report on the Single Market: He sees the “need for a certain degree of consolidation within national markets” given the scale of investment required in new technologies such as edge/cloud or 6G.
However, Letta’s focus is on breaking down the boundaries of today’s largely nationally organized markets. Mergers could then create “cross-border operators of a European dimension“.
CDU MEP Andreas Schwab argues similarly: “We should now create a genuine European single market for telecommunications services in which companies can leverage synergies.” In a large single market, larger players could also be permitted without increasing prices for consumers.
DIW expert Tomaso Duso argues that telecommunications companies are actually seeking more market power in their domestic markets in order to be able to raise prices. The companies could easily merge across borders, “the argument that strict merger control would prevent big players is a masterpiece of lobbying by the telecoms groups“.
The economist fears that the beneficiaries of looser supervision will hijack the current debate on Europe’s competitiveness problems. “We should not draw the wrong conclusions from this: Competition in the domestic market is the foundation for global competitiveness.” What is needed is a targeted European industrial policy – “and not one that distributes money to large companies with good political contacts”.
The highest European court has strengthened the protection of wolves in Spain. The judges of the European Court of Justice (ECJ) ruled that if the condition of the animals is poor at a national level, hunting should not simply be allowed in individual regions where wolves are slightly better off. An assessment of whether a population is in good condition must always be carried out “at the level of the biogeographical region or even across borders”, the Court stated.
As soon as an animal species is in an unfavorable conservation status, the competent authorities must take measures to ensure that the population is well in the future. The Luxembourg-based court also ruled that a regional law allowing wolves to be hunted in a certain region of Spain was in breach of EU law.
In Spain, wolves are subject to different protection regulations: Wolves south of the River Duero in northern Spain are strictly protected, so hunting them is generally prohibited. North of the river, a regional law reportedly permitted the hunting of the animals under certain conditions in 2019.
At the beginning of the 1970s, wolves were almost extinct in Spain. After the animals were placed under protection in the hunting law, the populations slowly recovered. A census in 1986-1988 recorded 294 packs. In a second census in 2012-2014, there were barely any more, 297 packs with a total of around 2,800 animals.
According to a report by state TV station RTVE, scientists have found that wolf populations have not recovered as well as in some other European countries. The development of the population was described as “unfavorable”. One of the reasons could be a dramatically shrunken gene pool as a result of the low number of animals and their spatial isolation. The wolves’ chances of survival have also decreased due to climate change and environmental pollution. dpa
The frustration is great. For years, companies have been promised a reduction in bureaucracy – but nothing has happened. On the contrary: politicians are constantly coming up with new projects, whether at state, federal or European level.
The result is reflected in a recent IHK survey. On a scale of one to ten, companies currently rate the burden of bureaucracy at 7.8, compared to 5.3 in 2019. A look towards Europe also confirms this: 95% of companies in the southwest say that the new EU Commission needs to tackle bureaucracy reduction with vigor. 85% believe that the flood of red tape significantly weakens the attractiveness of Europe as a business location.
An alarm signal for us and time to act. We were looking for a way to get away from the small details and develop systematic approaches. A discussion among colleagues – between the IT department and the legal department – gave rise to the idea of using AI for our purposes. We launched a bureaucracy check and asked our member companies to use the email address buerokratieabbau(at)stuttgart.ihk.de to report the examples from their day-to-day work where bureaucracy slows them down the most.
The majority of examples are small-scale statistical and reporting obligations as well as formal requirements. In addition, companies suffer from long and complex approval procedures and thus from poorly digitized and understaffed administrations.
So far, many hundreds of reports on bureaucratic burdens have been received. These are entered into an AI-based tool that is fed exclusively by us. In addition, our legal experts have collected, categorized and uploaded around 700 documents from all possible sources and used another AI to search through around 6300 individual standards from Baden-Württemberg state law.
The results are:
The next step is to target all application and approval procedures. The flood of legislation at the federal and EU level is also on our agenda and could be searched using our tool.
Our AI processes all the data entered, clusters it and our team uses it to develop solutions that can be adopted by the various legislators as overarching guidelines. Our specific proposals include, for example, generally doubling the threshold values for laws, such as the number of employees above which a regulation should apply.
In addition, it should be possible to fulfill any obligation to provide evidence, reporting or documentation by submitting a self-declaration; checks are carried out on a random basis. Each permit is deemed to have been granted if the competent authority has not decided on the application within eight weeks.
The same applies to the documents: they are deemed to be complete if the competent authority has not requested additional documents within four weeks. And if a written form is required anyway, it should also be possible in the future to submit it as an electronic declaration. We move many thousands of euros back and forth through online banking, but communication with an authority is not possible electronically?
The state of Baden-Württemberg has expressed interest in our AI tool. The relief alliance of politicians and associations launched by the state has issued a public call via the Ministry of Economic Affairs to report examples to us. We are already providing the relief alliance with specific examples of bureaucratic burdens in state law. Federal politicians have also become aware of our tool and have contacted the IHK.
Politicians can no longer ignore companies’ calls for relief. Our initial proposals are on the table. We are convinced that reducing bureaucracy is possible if it is wanted. The ball is now in the politicians’ court. But we will not give up until the 180-degree turnaround is initiated.
Claus Paal is the President of the IHK Stuttgart Region.