Duty or no duty, that is the question! The question that Mexico and Canada in particular are currently asking themselves. Yesterday, Mexico and Canada were able to postpone the announced tariff for a month. What the tariffs would mean for the EU economically is still unclear. Mexico and Canada export cars worth USD34 billion and USD27 billion respectively to the USA. If they suddenly have to look for a new target market, this would certainly not be good news for European car manufacturers.
Meanwhile, the EU is eagerly awaiting April 1. This is when officials are due to report to US President Donald Trump on the trade deficit with the EU and potential state financing through import tariffs. But things could also go off before then – you never know with Trump. At yesterday’s informal summit in Brussels, the heads of state and government showed their determination to stand united against Trump – you can read more about this Stephan Israel’s feature.
This Tuesday, the EU’s industry and trade ministers will also be encouraging each other. They are meeting in Warsaw for an informal, joint Jumbo Council to break down the silo mentality between trade and industrial policy. “It has become obvious that we need to start linking these two policy areas in order to tackle the problem of European competitiveness holistically,” writes the Polish Council Presidency in a preparatory document.
Another discussion today will revolve around the integration of the candidate countries into European supply chains. For Poland in particular, it is important that EU companies can count on a level playing field in Ukraine. The Polish government wants to prevent Ukraine from being able to use the preferential EU market access it currently enjoys without Polish companies in Ukraine enjoying the same competitive conditions as Ukrainian companies in Poland.
Greetings from Warsaw,
“We need to do more, move faster, and act together,” said EU Council President António Costa at the end of the first defense summit in Brussels. Russia’s war in Ukraine and the hybrid attacks made a European response necessary in order to guarantee security for all citizens and the continent.
The closed meeting is intended to provide guidelines for the White Paper on defense, which EU High Representative for Foreign Affairs Kaja Kallas will present on March 19. The focus will be on the most important capability gaps, in consultation with NATO and in areas where Europe can offer added value, said António Costa. The EU Council President specifically mentioned European missile defense, long-range precision weapons, and military mobility.
Second on the agenda of the retreat was the sensitive issue of financing: Europe must mobilize private and public funds, said António Costa. The Council President mentioned all options, from a stronger role for the European Investment Bank, to ways of granting member states more flexibility in applying the budgetary criteria of the Stability Pact, to the next multiannual financial framework and innovative instruments, the keyword being joint debt. For example, European financing could be discussed for a European missile defense system.
However, the camp of opponents of defense bonds appears to be shrinking further. After Denmark, Finland also signaled at the summit that it is open to all options: Russia is a permanent and existential threat to the EU and its member states, said Finnish Prime Minister Petteri Orpo in Brussels. His government is open to various solutions as to how common defense can be financed. It will also need common European money.
Greek Prime Minister Kyriakos Mitsotakis called for joint defense spending of at least EUR 100 billion in a guest article in the Financial Times. The move comes a week after the four frontline states Lithuania, Estonia, Latvia and Poland presented a paper with an identical demand. If the EU wants to remain a pole of peace and stability, it must build a robust, unified, and credible deterrent capability, Mitsotakis said. There was no time to lose.
Olaf Scholz, on the other hand, reiterated his rejection of Eurobonds: The EU does not have the prospect of taking on joint debt. The Federal Chancellor focused on national financing: “I advocate that all states now spend two percent on defense.” Germany had achieved the two percent target with the help of the special fund and would have to continue looking for ways to permanently improve the Bundeswehr budget by 30 billion euros from 2028. In addition, concrete agreements are needed on how the defense industry can be strengthened: “We have a great deal of fragmentation today, quite unlike in the USA.”
The EU’s first defense summit was overshadowed by Donald Trump and his announcement to impose punitive tariffs on Europe’s industry. Poland’s Prime Minister Donald Tusk spoke of a “cruel paradox”: The West had to defend itself against Russia’s aggression and China’s expansion, and at the same time allies were looking for a reason for a conflict: everything had to be done to avert “this stupid and absolutely unnecessary” trade war.
Luxembourg’s Prime Minister Luc Frieden was also clear: Europe is no weaker than the USA. “If someone wants a trade conflict, they will get it.” Europe will respond with the same weapons if Trump gets serious with his tariffs. In the event of a trade war between the EU and the USA, China would become the laughing stock, said Austrian Chancellor Alexander Schallenberg. With the threat of war from an aggressive Russia on the one side and the threat of a trade war with the USA on the other, the Europeans’ position is unenviable.
That was quick: just two hours after being sworn in as Prime Minister by the Belgian King, Bart De Wever arrived at the informal EU summit in Brussels on Monday. “I suppose I’ll have to introduce myself here first,” said the new Belgian head of government. He also announced several important decisions.
For example, De Wever wants to reduce the Belgian budget deficit, but at the same time increase defense spending in order to meet the NATO target of at least two percent of GDP. This is squaring the circle – it will not succeed without massive cuts in other areas.
This was also one reason why it took 236 days to form a government in Belgium and the initial deadline set at the turn of the year was missed. Another reason is the heterogeneous coalition that the once feared Flemish separatist De Wever had to form in order to secure a majority in a deeply divided Belgium and lead the country after all.
In addition to De Wever’s right-wing and xenophobic N-VA, the coalition now includes the liberal MR party and the center party Les Engagés from French-speaking Wallonia as well as the Flemish Christian Democrats (CD&V) and Social Democrats (Vooruit).
The unusual alliance is called “Arizona” – because of the parties’ colors: orange (CD&V), blue (MR and Les Engagés), red (Vooruit) and yellow (N-VA). These colors match those of the US state. However, they do not really harmonize. As can already be seen in the composition of the new Belgian government.
De Wever’s Flemish nationalists have secured the most important posts. In addition to the Prime Minister, the N-VA has appointed Defense Minister Theo Francken, Migration Minister Anneleen Van Bossuyt and Finance Minister Jan Jambon. Jambon was already Minister of the Interior between 2014 and 2018 under the then liberal head of government Charles Michel, while Francken was State Secretary for Asylum and Migration. The new Foreign Minister will be Maxime Prévot from the Les Engagés party.
From the MR, David Clarinval joins the government as Deputy Prime Minister. He will be responsible for the economy, agriculture and employment. Interim Foreign Minister Bernard Quintin takes over the Interior portfolio, Mathieu Bihet joins the cabinet as Energy Minister.
The liberal MR will also appoint the Minister for Small and Medium-Sized Enterprises: 26-year-old politician Eléonore Simonet, previously a lawyer in Brussels, will also be responsible for small and medium-sized enterprises in the future. To everyone’s surprise, MR boss Georges-Louis Bouchez has not joined the government. He prefers to continue to lead the Walloon Liberals. Becoming a minister would have meant an excessive accumulation of posts, according to Brussels.
However, the fact that a heavyweight like Bouchez is not part of the government could become a problem for De Wever and his Arizona coalition. He had shaped the coalition negotiations for long stretches.
Another problem is likely to be the announced budget cuts. Public sector employees have already gone on strike several times “preventively” against the feared social cuts. The trade unions have announced further nationwide protests for February.
Belgium must prepare itself for troubled times, as some immediate measures are also unpopular. For example, the new government has announced that profits from the sale of shares will be taxed at ten percent as soon as they exceed €10,000. Such a tax on profits, which the Flemish Social Democrats had called for, was controversial until the very end. In addition, the payment of unemployment benefits will be limited to two years and early retirement will be penalized with a “malus” on the pension. Smokers must also expect restrictions: in future, they will no longer be allowed to smoke on restaurant terraces.
The Arizona coalition is clearly right-wing when it comes to asylum and migration policy. It not only wants to restrict immigration and make naturalization more difficult. It also plans to reduce the capacity of reception facilities for asylum seekers – although the number of places is already insufficient. In the future, the Belgian authorities will also be allowed to search homes to search for irregular migrants. This was also controversial in the coalition negotiations and is likely to cause trouble.
The opposition is already on the barricades. “Where are the women?” asked the leader of the Walloon Socialists, Paul Magnette, after the presentation of the new cabinet. The fact that women are underrepresented and the few female ministers in the official “family photo” have been relegated to the second row is symptomatic, said Magnette. For him, the new center-right government is synonymous with a dismantling of women’s rights. In addition, all important posts have been given to Flemings, criticizes the opposition leader from Wallonia.
In fact, the new Prime Minister De Wever has filled many important ministries with Flemish party colleagues. He has also announced a reform of the state. This is intended to transfer further federal powers back to the regions – and therefore also to Flanders. The details will be interesting. De Wever has reserved the right to work them out personally.
The first bans from the AI Act came into force on February 2, 2025. These include the use of AI systems for subliminal manipulation, social scoring based on the Chinese model and the use of biometric remote identification in real time in public spaces, apart from a few clearly defined exceptions. These measures are right and necessary. They represent the EU’s efforts to put artificial intelligence on an ethical footing and protect consumer rights.
A uniform European legal framework for AI that focuses on ethics, diversity and data security is expressly welcomed. However, the regulation must also be practicable. This is where a dangerous weakness of the AI Act becomes apparent: some of the regulations are too unclear, too vaguely formulated and harbor the risk of inconsistent national implementation.
The use of AI will be crucial in the coming years if we are to make the leap into the new age as a nation dominated by industry. Combining Germany’s excellent engineering expertise with new digital know-how can help reverse the trend of declining productivity growth. New digital business models are opening up dynamic growth opportunities in all sectors – autonomous driving is just one example of many.
We must seize these opportunities because Germany is currently living off its substance. According to surveys by the International Labor Organization (ILO ), the annual growth rate of labor productivity was only just above zero percent from 2001 to 2020 and 0.8 percent from 2021 to 2023. AI has the potential to increase productivity growth by around 1.3 percent per year at its peak – according to a recent study by the German Economic Institute, this would increase gross added value in Germany by €330 billion.
Innovative companies that use AI already generate 32 percent of their turnover with new products or services, according to a recent study conducted by the IW on behalf of the Alliance for Strengthening Digital Infrastructures, which was founded under the umbrella of the Eco Association. For innovative companies that do not use AI, the proportion is 25 percent.
The development and use of AI is therefore not just a “nice-to-have” for some particularly innovative companies, but will become a basic prerequisite for the competitiveness and growth of the German and European economy across all sectors in the coming years. A practicable legal framework is therefore essential for Europe as a business location.
Unfortunately, the implementation of the AI Act in the member states, particularly in Germany, has been a long time coming. While the EU is creating an overarching legal framework for artificial intelligence with the AI Act, there are still considerable uncertainties when it comes to national implementation. Both the standardization of technical specifications and the exact definition of AI systems remain unclear. For German companies – primarily small and medium-sized enterprises (SMEs) – this means considerable legal uncertainty.
Those who invest now cannot be sure that their AI solutions will be compliant in the long term. If there is a lack of clear technical standards, there is a risk of a regulatory vacuum that inhibits innovation and creates additional uncertainty instead of legal certainty.
Even more serious is the fact that the national implementation of the AI Act could vary greatly. Instead of a uniform market, there is a threat of a patchwork of regulations that will fragment rather than strengthen the European single market. The result: more bureaucracy, higher costs and a locational disadvantage for companies that are already under massive regulatory pressure.
While Europe relies on strict regulation and supranational control with the AI Act, the USA is pursuing a decentralized and market-oriented approach. There, responsibility increasingly lies with the states. This means that California already has particularly strict rules for AI, especially in the areas of data protection and automated decision-making. Texas and Florida, on the other hand, rely on business-friendly, innovation-promoting regulation with minimal intervention.
This regulatory contrast cannot be ignored. While flexibility and market dynamics are encouraged in the US, Europe struggles with cumbersome bureaucratic structures and regulatory uncertainty. The risk is real that investments in AI will increasingly take place outside Europe. Companies could look for locations with more favorable framework conditions – with long-term negative consequences for Germany as a business location.
Rapid, uniform standardization at the EU level is now crucial in order to give companies planning security. At the same time, a more precise definition of AI systems is needed so that software solutions are not unnecessarily subject to restrictive requirements and the scope for innovation is not artificially limited.
Close coordination between the AI Act and the Code of Practice is also necessary in order to avoid double regulation and excessive bureaucracy. In addition, targeted measures must be taken to promote investment and innovation in Germany so that the country can remain globally competitive.
The AI Act offers Europe the historic opportunity to position itself as a leading AI location. However, this claim can only be fulfilled if the regulation is practicable and companies are provided with clear, reliable framework conditions. Vague specifications and national uncertainties counteract the positive approaches of the law and threaten to create new obstacles instead of legal certainty. The EU has set itself ambitious goals – now it has to deliver.
As Managing Director, Alexander Rabe has been responsible for the strategic, political and communicative positioning of the eco Association of the Internet Industry in Berlin, Brussels and Cologne since 2018. Rabe joined eco in 2016 as Head of Policy, Law and Regulation and headed eco’s capital city office in Berlin. Rabe is co-initiator of the Alliance for Strengthening Digital Infrastructures in Germany, which was founded in 2018 under the umbrella of eco.
This phrase, more a sigh than a genuine question, is familiar to almost everyone in Brussels. “Who do I call when I want to call Europe?”, former US Secretary of State Henry Kissinger is said to have once said. It was a gentle reminder that the EU, along with its competences and distribution of power, is difficult to understand from the outside.
The reverse question is perplexing many decision-makers in Brussels these days. Who do I call if I want to talk to Donald Trump? Or at least if I want to know what he has planned for Europe in the coming weeks and months? So far, no one in the EU capital has found a suitable telephone number. “Nobody has access,” says an insider. “We don’t know these people around Trump.”
After changes of government in democracies, politicians and their aides can usually rely on their networks. They know someone who knows someone who will be in a key position in the future. These days, however, many in Brussels are having a bitter experience: their networks are simply worthless.
They also fail to reach the circle around Donald Trump via two or three corners. “How are we supposed to reach someone who works at Fox News?” says a Brussels player. There is a lack of mutual acquaintances. Trump’s choice of personnel very clearly reflects his aversion to proven experts. The staff in the Ministry of Finance and the Ministry of Trade in particular are unknown in Europe. Diplomats criticize that the EU Commission does not want to reveal who it is actually talking to.
Even if Brussels officials manage to reach Trump’s wider circle, they receive contradictory answers. His plans for Europe? The second and third tiers are unable to say anything reliable. And Trump’s ministers are apparently explicitly instructed not to talk to foreigners before their confirmation by the Senate.
Even during Trump’s first term in office, Europeans struggled to maintain contact across the Atlantic. Many a politician got creative. For example, there are stories in Brussels about how the then Minister for Economic Affairs, Peter Altmaier, made contact with Trump’s top economic advisor, Larry Kudlow, via the then Secretary of the Treasury, Hank Paulson. But even the game of brinkmanship will be more challenging this time, according to Brussels. It’s as if Team Trump has once again moved a little further away from the mainstream.
By the way: Kissinger, who died in 2023, publicly admitted in his late 80s that he had never said the sentence about the EU. But because he liked it, he had not resisted the attribution for decades. He had no idea how few cross-Atlantic phone calls there would be in 2025. Silke Wettach
Duty or no duty, that is the question! The question that Mexico and Canada in particular are currently asking themselves. Yesterday, Mexico and Canada were able to postpone the announced tariff for a month. What the tariffs would mean for the EU economically is still unclear. Mexico and Canada export cars worth USD34 billion and USD27 billion respectively to the USA. If they suddenly have to look for a new target market, this would certainly not be good news for European car manufacturers.
Meanwhile, the EU is eagerly awaiting April 1. This is when officials are due to report to US President Donald Trump on the trade deficit with the EU and potential state financing through import tariffs. But things could also go off before then – you never know with Trump. At yesterday’s informal summit in Brussels, the heads of state and government showed their determination to stand united against Trump – you can read more about this Stephan Israel’s feature.
This Tuesday, the EU’s industry and trade ministers will also be encouraging each other. They are meeting in Warsaw for an informal, joint Jumbo Council to break down the silo mentality between trade and industrial policy. “It has become obvious that we need to start linking these two policy areas in order to tackle the problem of European competitiveness holistically,” writes the Polish Council Presidency in a preparatory document.
Another discussion today will revolve around the integration of the candidate countries into European supply chains. For Poland in particular, it is important that EU companies can count on a level playing field in Ukraine. The Polish government wants to prevent Ukraine from being able to use the preferential EU market access it currently enjoys without Polish companies in Ukraine enjoying the same competitive conditions as Ukrainian companies in Poland.
Greetings from Warsaw,
“We need to do more, move faster, and act together,” said EU Council President António Costa at the end of the first defense summit in Brussels. Russia’s war in Ukraine and the hybrid attacks made a European response necessary in order to guarantee security for all citizens and the continent.
The closed meeting is intended to provide guidelines for the White Paper on defense, which EU High Representative for Foreign Affairs Kaja Kallas will present on March 19. The focus will be on the most important capability gaps, in consultation with NATO and in areas where Europe can offer added value, said António Costa. The EU Council President specifically mentioned European missile defense, long-range precision weapons, and military mobility.
Second on the agenda of the retreat was the sensitive issue of financing: Europe must mobilize private and public funds, said António Costa. The Council President mentioned all options, from a stronger role for the European Investment Bank, to ways of granting member states more flexibility in applying the budgetary criteria of the Stability Pact, to the next multiannual financial framework and innovative instruments, the keyword being joint debt. For example, European financing could be discussed for a European missile defense system.
However, the camp of opponents of defense bonds appears to be shrinking further. After Denmark, Finland also signaled at the summit that it is open to all options: Russia is a permanent and existential threat to the EU and its member states, said Finnish Prime Minister Petteri Orpo in Brussels. His government is open to various solutions as to how common defense can be financed. It will also need common European money.
Greek Prime Minister Kyriakos Mitsotakis called for joint defense spending of at least EUR 100 billion in a guest article in the Financial Times. The move comes a week after the four frontline states Lithuania, Estonia, Latvia and Poland presented a paper with an identical demand. If the EU wants to remain a pole of peace and stability, it must build a robust, unified, and credible deterrent capability, Mitsotakis said. There was no time to lose.
Olaf Scholz, on the other hand, reiterated his rejection of Eurobonds: The EU does not have the prospect of taking on joint debt. The Federal Chancellor focused on national financing: “I advocate that all states now spend two percent on defense.” Germany had achieved the two percent target with the help of the special fund and would have to continue looking for ways to permanently improve the Bundeswehr budget by 30 billion euros from 2028. In addition, concrete agreements are needed on how the defense industry can be strengthened: “We have a great deal of fragmentation today, quite unlike in the USA.”
The EU’s first defense summit was overshadowed by Donald Trump and his announcement to impose punitive tariffs on Europe’s industry. Poland’s Prime Minister Donald Tusk spoke of a “cruel paradox”: The West had to defend itself against Russia’s aggression and China’s expansion, and at the same time allies were looking for a reason for a conflict: everything had to be done to avert “this stupid and absolutely unnecessary” trade war.
Luxembourg’s Prime Minister Luc Frieden was also clear: Europe is no weaker than the USA. “If someone wants a trade conflict, they will get it.” Europe will respond with the same weapons if Trump gets serious with his tariffs. In the event of a trade war between the EU and the USA, China would become the laughing stock, said Austrian Chancellor Alexander Schallenberg. With the threat of war from an aggressive Russia on the one side and the threat of a trade war with the USA on the other, the Europeans’ position is unenviable.
That was quick: just two hours after being sworn in as Prime Minister by the Belgian King, Bart De Wever arrived at the informal EU summit in Brussels on Monday. “I suppose I’ll have to introduce myself here first,” said the new Belgian head of government. He also announced several important decisions.
For example, De Wever wants to reduce the Belgian budget deficit, but at the same time increase defense spending in order to meet the NATO target of at least two percent of GDP. This is squaring the circle – it will not succeed without massive cuts in other areas.
This was also one reason why it took 236 days to form a government in Belgium and the initial deadline set at the turn of the year was missed. Another reason is the heterogeneous coalition that the once feared Flemish separatist De Wever had to form in order to secure a majority in a deeply divided Belgium and lead the country after all.
In addition to De Wever’s right-wing and xenophobic N-VA, the coalition now includes the liberal MR party and the center party Les Engagés from French-speaking Wallonia as well as the Flemish Christian Democrats (CD&V) and Social Democrats (Vooruit).
The unusual alliance is called “Arizona” – because of the parties’ colors: orange (CD&V), blue (MR and Les Engagés), red (Vooruit) and yellow (N-VA). These colors match those of the US state. However, they do not really harmonize. As can already be seen in the composition of the new Belgian government.
De Wever’s Flemish nationalists have secured the most important posts. In addition to the Prime Minister, the N-VA has appointed Defense Minister Theo Francken, Migration Minister Anneleen Van Bossuyt and Finance Minister Jan Jambon. Jambon was already Minister of the Interior between 2014 and 2018 under the then liberal head of government Charles Michel, while Francken was State Secretary for Asylum and Migration. The new Foreign Minister will be Maxime Prévot from the Les Engagés party.
From the MR, David Clarinval joins the government as Deputy Prime Minister. He will be responsible for the economy, agriculture and employment. Interim Foreign Minister Bernard Quintin takes over the Interior portfolio, Mathieu Bihet joins the cabinet as Energy Minister.
The liberal MR will also appoint the Minister for Small and Medium-Sized Enterprises: 26-year-old politician Eléonore Simonet, previously a lawyer in Brussels, will also be responsible for small and medium-sized enterprises in the future. To everyone’s surprise, MR boss Georges-Louis Bouchez has not joined the government. He prefers to continue to lead the Walloon Liberals. Becoming a minister would have meant an excessive accumulation of posts, according to Brussels.
However, the fact that a heavyweight like Bouchez is not part of the government could become a problem for De Wever and his Arizona coalition. He had shaped the coalition negotiations for long stretches.
Another problem is likely to be the announced budget cuts. Public sector employees have already gone on strike several times “preventively” against the feared social cuts. The trade unions have announced further nationwide protests for February.
Belgium must prepare itself for troubled times, as some immediate measures are also unpopular. For example, the new government has announced that profits from the sale of shares will be taxed at ten percent as soon as they exceed €10,000. Such a tax on profits, which the Flemish Social Democrats had called for, was controversial until the very end. In addition, the payment of unemployment benefits will be limited to two years and early retirement will be penalized with a “malus” on the pension. Smokers must also expect restrictions: in future, they will no longer be allowed to smoke on restaurant terraces.
The Arizona coalition is clearly right-wing when it comes to asylum and migration policy. It not only wants to restrict immigration and make naturalization more difficult. It also plans to reduce the capacity of reception facilities for asylum seekers – although the number of places is already insufficient. In the future, the Belgian authorities will also be allowed to search homes to search for irregular migrants. This was also controversial in the coalition negotiations and is likely to cause trouble.
The opposition is already on the barricades. “Where are the women?” asked the leader of the Walloon Socialists, Paul Magnette, after the presentation of the new cabinet. The fact that women are underrepresented and the few female ministers in the official “family photo” have been relegated to the second row is symptomatic, said Magnette. For him, the new center-right government is synonymous with a dismantling of women’s rights. In addition, all important posts have been given to Flemings, criticizes the opposition leader from Wallonia.
In fact, the new Prime Minister De Wever has filled many important ministries with Flemish party colleagues. He has also announced a reform of the state. This is intended to transfer further federal powers back to the regions – and therefore also to Flanders. The details will be interesting. De Wever has reserved the right to work them out personally.
The first bans from the AI Act came into force on February 2, 2025. These include the use of AI systems for subliminal manipulation, social scoring based on the Chinese model and the use of biometric remote identification in real time in public spaces, apart from a few clearly defined exceptions. These measures are right and necessary. They represent the EU’s efforts to put artificial intelligence on an ethical footing and protect consumer rights.
A uniform European legal framework for AI that focuses on ethics, diversity and data security is expressly welcomed. However, the regulation must also be practicable. This is where a dangerous weakness of the AI Act becomes apparent: some of the regulations are too unclear, too vaguely formulated and harbor the risk of inconsistent national implementation.
The use of AI will be crucial in the coming years if we are to make the leap into the new age as a nation dominated by industry. Combining Germany’s excellent engineering expertise with new digital know-how can help reverse the trend of declining productivity growth. New digital business models are opening up dynamic growth opportunities in all sectors – autonomous driving is just one example of many.
We must seize these opportunities because Germany is currently living off its substance. According to surveys by the International Labor Organization (ILO ), the annual growth rate of labor productivity was only just above zero percent from 2001 to 2020 and 0.8 percent from 2021 to 2023. AI has the potential to increase productivity growth by around 1.3 percent per year at its peak – according to a recent study by the German Economic Institute, this would increase gross added value in Germany by €330 billion.
Innovative companies that use AI already generate 32 percent of their turnover with new products or services, according to a recent study conducted by the IW on behalf of the Alliance for Strengthening Digital Infrastructures, which was founded under the umbrella of the Eco Association. For innovative companies that do not use AI, the proportion is 25 percent.
The development and use of AI is therefore not just a “nice-to-have” for some particularly innovative companies, but will become a basic prerequisite for the competitiveness and growth of the German and European economy across all sectors in the coming years. A practicable legal framework is therefore essential for Europe as a business location.
Unfortunately, the implementation of the AI Act in the member states, particularly in Germany, has been a long time coming. While the EU is creating an overarching legal framework for artificial intelligence with the AI Act, there are still considerable uncertainties when it comes to national implementation. Both the standardization of technical specifications and the exact definition of AI systems remain unclear. For German companies – primarily small and medium-sized enterprises (SMEs) – this means considerable legal uncertainty.
Those who invest now cannot be sure that their AI solutions will be compliant in the long term. If there is a lack of clear technical standards, there is a risk of a regulatory vacuum that inhibits innovation and creates additional uncertainty instead of legal certainty.
Even more serious is the fact that the national implementation of the AI Act could vary greatly. Instead of a uniform market, there is a threat of a patchwork of regulations that will fragment rather than strengthen the European single market. The result: more bureaucracy, higher costs and a locational disadvantage for companies that are already under massive regulatory pressure.
While Europe relies on strict regulation and supranational control with the AI Act, the USA is pursuing a decentralized and market-oriented approach. There, responsibility increasingly lies with the states. This means that California already has particularly strict rules for AI, especially in the areas of data protection and automated decision-making. Texas and Florida, on the other hand, rely on business-friendly, innovation-promoting regulation with minimal intervention.
This regulatory contrast cannot be ignored. While flexibility and market dynamics are encouraged in the US, Europe struggles with cumbersome bureaucratic structures and regulatory uncertainty. The risk is real that investments in AI will increasingly take place outside Europe. Companies could look for locations with more favorable framework conditions – with long-term negative consequences for Germany as a business location.
Rapid, uniform standardization at the EU level is now crucial in order to give companies planning security. At the same time, a more precise definition of AI systems is needed so that software solutions are not unnecessarily subject to restrictive requirements and the scope for innovation is not artificially limited.
Close coordination between the AI Act and the Code of Practice is also necessary in order to avoid double regulation and excessive bureaucracy. In addition, targeted measures must be taken to promote investment and innovation in Germany so that the country can remain globally competitive.
The AI Act offers Europe the historic opportunity to position itself as a leading AI location. However, this claim can only be fulfilled if the regulation is practicable and companies are provided with clear, reliable framework conditions. Vague specifications and national uncertainties counteract the positive approaches of the law and threaten to create new obstacles instead of legal certainty. The EU has set itself ambitious goals – now it has to deliver.
As Managing Director, Alexander Rabe has been responsible for the strategic, political and communicative positioning of the eco Association of the Internet Industry in Berlin, Brussels and Cologne since 2018. Rabe joined eco in 2016 as Head of Policy, Law and Regulation and headed eco’s capital city office in Berlin. Rabe is co-initiator of the Alliance for Strengthening Digital Infrastructures in Germany, which was founded in 2018 under the umbrella of eco.
This phrase, more a sigh than a genuine question, is familiar to almost everyone in Brussels. “Who do I call when I want to call Europe?”, former US Secretary of State Henry Kissinger is said to have once said. It was a gentle reminder that the EU, along with its competences and distribution of power, is difficult to understand from the outside.
The reverse question is perplexing many decision-makers in Brussels these days. Who do I call if I want to talk to Donald Trump? Or at least if I want to know what he has planned for Europe in the coming weeks and months? So far, no one in the EU capital has found a suitable telephone number. “Nobody has access,” says an insider. “We don’t know these people around Trump.”
After changes of government in democracies, politicians and their aides can usually rely on their networks. They know someone who knows someone who will be in a key position in the future. These days, however, many in Brussels are having a bitter experience: their networks are simply worthless.
They also fail to reach the circle around Donald Trump via two or three corners. “How are we supposed to reach someone who works at Fox News?” says a Brussels player. There is a lack of mutual acquaintances. Trump’s choice of personnel very clearly reflects his aversion to proven experts. The staff in the Ministry of Finance and the Ministry of Trade in particular are unknown in Europe. Diplomats criticize that the EU Commission does not want to reveal who it is actually talking to.
Even if Brussels officials manage to reach Trump’s wider circle, they receive contradictory answers. His plans for Europe? The second and third tiers are unable to say anything reliable. And Trump’s ministers are apparently explicitly instructed not to talk to foreigners before their confirmation by the Senate.
Even during Trump’s first term in office, Europeans struggled to maintain contact across the Atlantic. Many a politician got creative. For example, there are stories in Brussels about how the then Minister for Economic Affairs, Peter Altmaier, made contact with Trump’s top economic advisor, Larry Kudlow, via the then Secretary of the Treasury, Hank Paulson. But even the game of brinkmanship will be more challenging this time, according to Brussels. It’s as if Team Trump has once again moved a little further away from the mainstream.
By the way: Kissinger, who died in 2023, publicly admitted in his late 80s that he had never said the sentence about the EU. But because he liked it, he had not resisted the attribution for decades. He had no idea how few cross-Atlantic phone calls there would be in 2025. Silke Wettach
