European Commission publishes a “Competitiveness Compass” and its Annual Work Programme – key aspects for financial services
Written by
RegCORE – Client Alert | Banking Union | Capital Markets Union | Insurance Union
QuickTake
Improving competitiveness, including by way of simplification plus regulatory burden reduction, and the strategic autonomy of the EU’s Single Market more generally as well as for financial services more specifically has been placed in the spotlight in 2024 and continues to remain so in 2025. These considerations are part of the European Commission’s longer-term priorities for the current 2024-2029 legislative cycle.
On 29 January 2025 the European Commission presented a Communication on a “Competitiveness Compass for the EU”Available here.Show Footnote and on 11 February the European Commission’s long-awaited annual work programme (AWP) for 2025See microsite here.Show Footnote along with respective AnnexesAvailable here.Show Footnote (indicating which work is prioritised and which was to be deprioritised) was released.
As explored in this Client Alert, the European Commission’s AWP outlines a series of legislative and non-legislative initiatives (such as the published Competitiveness Compass) aimed at enhancing the EU’s competitiveness and strategic autonomy, sustainability, security and social fairness. The AWP also sets out a number of areas that will be reviewed and amended during 2025. Importantly the non-legislative initiatives published in 2025 may yield to respective legislative initiatives that are published in the path through to the end of 2029.
Key takeaways from the Competitiveness Compass
The European Commission’s “Competitiveness Compass for the EU” is a detailed and 27-page document. It presents a comprehensive strategy aimed at tackling the priority sectors referred to in the Draghi ReportSee Client Alert available here.Show Footnote as well as more broadly. These all aim to advance innovation, simplification of legislation and reducing foreign dependencies.
This overarching non-legislative initiative, along with the respective legislative instruments that are to be advanced in furtherance of the aims of the Competitiveness Compass, are likely to offer significant benefits for but equally present a number of compliance implications for regulated firms across various sectors, including specifically for financial services. In the course of various key themes, the Competitiveness Compass sets out a number of priorities scheduled for action. These can be summarised as follows:
