Raziye Akkoc
Entrepreneurs will be able to create pan-European companies under new plans to be unveiled Wednesday, which the EU executive states will build 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, 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 notified 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 believe tank Bruegel declared the goal was “improving (Europe’s) innovation capacity becautilize 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 nereceivediate 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.
– ‘Easy recognition’ –
McGrath declared companies will be able to set up fully online within 48 hours through a single access point, with no minimum capital requirement.
“Fast and simple recognition should build it clearer… for companies to grow on an EU scale,” Veugelers declared.
But the new system’s speed could build 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 declared.
Organisations representing European workers are also worried about a shift 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 utilized to justify wage exploitation in the present,” she declared in a statement.
The commission has insisted 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, indusattempt group EU Inc — which inspired the name of the commission proposal — declared 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 declared.
The group called on Brussels to create a central court for dispute resolution.
The EU’s McGrath declared the new regime would assist companies avoid navigating 27 legal systems, which “slows growth, increases costs and often discourages companies from scaling up across Europe”.
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