EU’s Incoming Competition Head Pushes for Policy Shift to Support ‘European Champions

Brussels is set to enter a new era of competition policy, as the European Union’s incoming competition chief, Teresa Ribera, promises a more flexible approach to merger rules aimed at bolstering European companies’ global competitiveness. In an interview with the Financial Times, Ribera emphasized the need for reform that will allow European businesses to grow and compete on the international stage, particularly against rivals from the US and China.

Ribera, a former deputy prime minister of Spain, was recently nominated to one of the most influential portfolios in the European Commission. Her responsibilities will include overseeing the bloc’s economic competitiveness, green transition, and enforcement of antitrust regulations. Speaking with the Financial Times, Ribera outlined a “step by step” approach to modernizing EU rules in ways that will clear barriers to innovation and boost investment.

“There is a question of size at the international level… I think there may be a need to improve things,” Ribera said, highlighting the importance of enabling European companies to scale up. She suggested that Brussels should encourage the creation of “industrial ecosystems” around key sectors, such as automotive manufacturing, to attract more investment and better utilize the region’s capital in its green transition efforts.

Ribera’s stance marks a potential shift in how the EU handles mergers and the rise of so-called “European champions,” large corporations capable of competing globally. As she told the Financial Times, the role of the competition portfolio “is not exactly the same [as before], but something that needs to evolve and to adapt to the circumstances.”

This could represent a significant change from the policies of Ribera’s predecessor, Margrethe Vestager, who held the competition role for a decade. Vestager, known for her stringent stance on regulating mergers, warned that overhauling merger rules could open a “Pandora’s box” and lead to “a lot of uncertainty.” Ribera acknowledged Vestager’s contributions but suggested that change may be necessary, stating, “Margarethe has done a great job and we need to see to what extent this great job needs to evolve… step by step.”

Ribera also emphasized the importance of fostering cross-border cooperation in the EU’s single market. “We need to be a little bit more innovative in the way we build a well-functioning European single market where not only the national and the local interests find a place, but the national and local match the European interests,” she told the Financial Times. She highlighted the challenge of balancing local priorities with broader European goals, adding that building a unified “European understanding” will be key.

Her comments come as Brussels faces increasing political pressure over its competition regulations, with critics arguing that these policies are hindering Europe’s largest corporations from expanding. At the same time, some EU member states are wary of reforms that could empower larger countries like France and Germany to dominate competition policy decisions, potentially at the expense of smaller states.

Ribera also faces challenges in aligning the EU’s ambitious climate goals with its industrial strategies. Some centre-right governments in the bloc are skeptical of her pro-climate stance, particularly when it comes to the cost and pace of the green transition. However, Ribera signaled that she is open to reviewing state aid rules to better support green investments. “The [climate] targets do provide some signals on what we want to achieve, but we need to create the elements, the incentives, and the confidence to do so,” she told the Financial Times.

Ribera’s vision coincides with recent concerns over the EU’s economic competitiveness. A report by former European Central Bank president Mario Draghi estimated that the EU requires an additional €800 billion per year in investments to remain competitive. While Ribera did not provide her own figure, she acknowledged the massive capital needs for Europe’s green transition, stressing the importance of avoiding mistakes. “What it’s clear is that the amount of capital that needs to be invested to accelerate this transition is so important that we had better not make mistakes,” she said.

As Europe navigates its post-pandemic recovery and grapples with the economic fallout of Russia’s invasion of Ukraine, Ribera believes swift and strategic decisions are crucial. Reflecting on the recent energy crisis, she stressed the need for proactive policy-making. “If we take the right decisions, we will be creating fantastic opportunities… If we delay those decisions, we may be killing the opportunities,” she warned in her interview with the Financial Times.

Source: The Financial Times