Brussels (Belgium) (AFP) – Entrepreneurs will be able to create pan-European companies under new plans to be unveiled Wednesday, which the EU executive says will make it less of a headache to do business across the bloc. The proposal, known as “EU Inc,” is part of ramped-up efforts to tackle the European Union’s competitiveness problem as the bloc’s economy and industries risk falling further behind the United States and China. Trade unions fear, however, that the new EU-wide regime will erode workers’ rights.
EU Inc “has a simple objective: to reduce fragmentation and allow businesses to operate across the single market under one clear set of corporate rules,” EU justice commissioner Michael McGrath told AFP in a statement. The voluntary legal regime is aimed at innovative companies in Europe, although it’s not clear how popular it will be. Reinhilde Veugelers of think tank Bruegel said the goal was “improving (Europe’s) innovation capacity because that is the most important driver for competitiveness.” The measures, also known as the “28th regime,” will become law only after member states and the European Parliament negotiate and approve a final text. EU leaders are expected to discuss the proposal during a Thursday summit in Brussels, although the Middle East war and the subsequent oil price shock is likely to dominate their talks.
McGrath said companies will be able to set up fully online within 48 hours through a single access point, with no minimum capital requirement. “Fast and easy recognition should make it easier…for companies to grow on an EU scale,” Veugelers said. But the new system’s speed could make it difficult to properly scrutinise new companies, argue campaigners including Olivier Hoedeman of Corporate Europe Observatory. “The 28th regime poses a significant threat to Europe’s social model,” he said.
Organisations representing European workers are also worried about a move to allow companies to offer share options to staff instead of wages. Esther Lynch of the European Trade Union Confederation slammed the plans. “We cannot expect that the promise of the future success of a company be used to justify wage exploitation in the present,” she said in a statement. The commission has insisted that labour law will not be touched by the proposal and that any business will have to follow the rules based on where they are headquartered.
After a leaked draft text came out, industry group EU Inc — which inspired the name of the commission proposal — said the plans fell short. It “fails on the actual main goal: creating one true standard across Europe that creates legal certainty for our startups,” since it defers legal authority to national courts, “aka 27 flavours of interpretation,” it said. The group called on Brussels to create a central court for dispute resolution.
The EU’s McGrath said the new regime would help companies avoid navigating 27 legal systems, which “slows growth, increases costs and often discourages companies from scaling up across Europe.”
© 2024 AFP
