The European Commission is once again focused on boosting Europe’s competitiveness, this time by integrating the bloc’s capital markets.
The EU executive published a range of measures on March 19, aimed at unlocking the €11.6 trillion ($12.8 trillion) currently sitting idle in European bank accounts.
This strategy includes offering tax breaks to encourage investment in European assets, adjusting rules for banks’ capital requirements, risk management and liquidity, as well as centralising market oversight, akin to the US Securities and Exchange Commission.
The proposals come at a time when Europe faces stagnating economic growth, trailing behind the US and China.
So, how can the EU boost its competitiveness and drive business growth? And what actions can European businesses take to close the gap and improve economic performance?
Last year, the eurozone’s economy grew by a modest 0.7 per cent and, over the past two decades, US labour productivity has grown more than twice as fast as Europe’s, according to the European Central Bank. This has led some policymakers, such as the ECB’s Isabel Schnabel, to warn that the bloc faces a “competitiveness crisis”.
The ECB is concerned that weak productivity could keep inflation elevated by driving up labour costs for eurozone companies, as it continues its cycle of cutting interest rates from recent highs.
One policy aimed at addressing this issue is the European Commission’s “competitiveness compass”, which seeks to streamline regulations and reduce administrative burdens on businesses.
The plan, announced by Commission President Ursula von der Leyen last November, and later leaked, includes slashing reporting requirements and simplifying sustainability rules – a response to EU business groups and national governments lobbying for a more business-friendly regulatory environment.
Critics say the EU is dealing with an overload of new regulations, especially in the green and digital sectors. However, there is a risk that deregulation could undermine Europe’s long-term competitiveness. In my view, its relatively strict rules provide an advantage.
Consider AI, where Europe’s regulations, through the Artificial Intelligence Act, offer clear benefits for both consumers and businesses. The law, passed in 2023, is considered the most comprehensive regulatory framework for AI globally. It includes provisions that ban specific applications, such as scraping the internet to build facial recognition databases, which helps raise trust in AI by outlawing bad practices.
For businesses, these regulations provide much-needed certainty. In the US, there is no comprehensive, nationwide legal framework specifically governing AI. As a result of this ambiguity, companies may be hesitant to fully implement AI technology.
The same applies to sustainability. The EU executive plans to simplify regulations, particularly by reducing reporting requirements, at a time when US President Donald Trump is pushing a deregulation agenda.
While the EU’s ambitious green goals, such as strict car emissions standards, have led to increased competition from cheaper foreign alternatives, especially from China, the bloc’s Green Deal climate law has provided businesses with a clear path to meet decarbonisation targets. I believe this clarity gives European companies a competitive edge, allowing them to plan and innovate with confidence.
The EU must integrate its financial markets – harmonising rules and reporting standards and removing regulatory barriers
Arturo Bris,
IMD
In contrast, Mr Trump has rolled back environmental protections in the US since taking office.
However, one of Europe’s biggest challenges is its fragmented financial markets. As former ECB chief and former Italian prime minister Mario Draghi highlighted in a report published last year, this fragmentation hinders competitiveness.
Capital flows more freely to the US because of its unified financial system and consistent regulatory frameworks across states, making it easier for businesses to raise capital and expand operations. In contrast, European businesses face varying regulations when operating across borders. While there are overarching EU rules, national regulations in areas such as taxation, accounting standards and financial oversight still differ.
To tackle this, I believe the EU must integrate its financial markets – harmonising rules and reporting standards and removing regulatory barriers, like differing national rules on capital requirements, tax regulations and securities laws.
Aligning accounting standards, like IFRS, across all EU member states and sectors would ensure consistent financial reporting, creating a more efficient and attractive environment for investors and businesses.
This would simplify capital raising, financial reporting and regulatory compliance – ultimately reducing costs and complexity for companies operating across a number of EU countries.
To succeed in this endeavour, the European Commission will need to strike a balance between centralised supervision and the interests of member states that may be wary of handing over regulatory control to the EU.
Another potential, though controversial, tool for boosting Europe’s competitiveness is selective protectionism. The EU is considering a “Buy European” procurement plan that would allow governments to exclude foreign bidders in critical sectors such as defence, energy and technology.
Similar to Mr Trump’s “America First” policy, this plan aims to protect European industries from cheaper foreign competition, particularly from China.
While protectionism carries risks, especially in terms of breaching international trade agreements, it may be necessary for Europe to protect its industries from unfair competition.
The EU has already shown its commitment to defending its economic interests, as seen in its response to US tariffs on steel and aluminium, through retaliatory tariffs on US products such as bourbon and motorcycles. Protectionism does not need to come in the form of tariffs, however. Instead, Europe can limit industry access to domestic players, as China does with its media, insurance and other sectors.
By focusing on supporting European companies in this way, the EU can help its industries stay competitive.
Europe’s sluggish economic performance compared to the US and China is concerning but it is not insurmountable. With policies such as integrating its financial markets, simplifying regulations and ensuring a unified framework for sustainability and AI, the EU can close its competitiveness gap.
Businesses must also rise to the occasion by committing to the green transition. Moreover, it is essential for companies to collaborate closely with governments and regulators to support EU competitiveness and not block regulatory progress.
A list of the animal rescue organisations in the UAE
Zayed Sustainability Prize
World Cup League Two
Results
Oman beat Nepal by 18 runs
Oman beat United States by six wickets
Nepal beat United States by 35 runs
Oman beat Nepal by eight wickets
Fixtures
Tuesday, Oman v United States
Wednesday, Nepal v United States
more from Janine di Giovanni
Company%20profile
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Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
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German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
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MATCH INFO
Maratha Arabians 107-8 (10 ovs)
Lyth 21, Lynn 20, McClenaghan 20 no
Qalandars 60-4 (10 ovs)
Malan 32 no, McClenaghan 2-9
Maratha Arabians win by 47 runs
'Munich: The Edge of War'
Director: Christian Schwochow
Starring: George MacKay, Jannis Niewohner, Jeremy Irons
Rating: 3/5
EXPATS
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Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
RESULTS
5pm: Maiden (PA) Dh80,000 1,400m, Winner SS Lamea, Saif Al Balushi (jockey), Ibrahim Al Hadhrami (trainer).
5.30pm: Wathba Stallions Cup Handicap (PA) Dh70,000 1,400m, Winner AF Makerah, Sean Kirrane, Ernst Oertel
6pm: Handicap (PA) Dh80,000 1,600m, Winner Maaly Al Reef, Brett Doyle, Abdallah Al Hammadi
6.30pm: Handicap (PA) Dh90,000 1,600m, Winner AF Momtaz, Antonio Fresu, Musabah Al Muhairi
7pm: Handicap (PA) Dh80,000 2,200m, Winner Morjanah Al Reef, Brett Doyle, Abdallah Al Hammadi
7.30pm: Handicap (TB) Dh100,000 2,200m, Winner Mudarrab, Jim Crowley, Erwan Charpy
The Pope's itinerary
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
MATCH INFO
Borussia Dortmund 0
Bayern Munich 1 (Kimmich 43')
Man of the match: Joshua Kimmich (Bayern Munich)
COMPANY%20PROFILE
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South Africa v India schedule
Tests: 1st Test Jan 5-9, Cape Town; 2nd Test Jan 13-17, Centurion; 3rd Test Jan 24-28, Johannesburg
ODIs: 1st ODI Feb 1, Durban; 2nd ODI Feb 4, Centurion; 3rd ODI Feb 7, Cape Town; 4th ODI Feb 10, Johannesburg; 5th ODI Feb 13, Port Elizabeth; 6th ODI Feb 16, Centurion
T20Is: 1st T20I Feb 18, Johannesburg; 2nd T20I Feb 21, Centurion; 3rd T20I Feb 24, Cape Town
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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KILLING OF QASSEM SULEIMANI
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The specs: 2018 Dodge Durango SRT
Price, base / as tested: Dh259,000
Engine: 6.4-litre V8
Power: 475hp @ 6,000rpm
Torque: 640Nm @ 4,300rpm
Transmission: Eight-speed automatic
Fuel consumption, combined: 7.7L / 100km
Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
MATCH INFO
Liverpool 4 (Salah (pen 4, 33', & pen 88', Van Dijk (20')
Leeds United 3 (Harrison 12', Bamford 30', Klich 66')
Man of the match Mohamed Salah (Liverpool)
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
