U.S. President Trump delivers his inaugural address after being sworn in as the 47th President of the United States on January 20, 2025, in the Rotunda of the U.S. Capitol Building in Washington, DC.
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European chief executives appeared to watch with envy on Monday as President Donald Trump rolled back a raft of regulations, amid a growing chorus of calls for similar action across the continent.
Trump wasted no time on his first day in office, announcing a series of executive order It aims to support key industries, including limiting electric vehicle production targets and accelerating oil and gas production.
The re-elected president has long argued that regulation is stifling innovation and U.S. competitiveness, and campaigned for reelection on a promise to cut red tape. And European business leaders, facing a more assertive United States and increasing global competition, agree.
Morten Wierod, CEO of Swiss Robotics ABBIt warns that over-regulation and associated high costs are driving cutting-edge companies to other markets, ultimately risking the “deindustrialization of Europe.”
“There needs to be a clear reset of regulation and allowing businesses to continue to develop,” Wierod told CNBC’s “Squawk Box Europe” at the World Economic Forum in Davos, Switzerland.
Verrod added that EU regulations, while often well-intentioned, had become overly bureaucratic and needed to be simplified to give businesses the flexibility they need to innovate and grow.
“Every regulation is written with good intentions. But when you put it all together, it becomes too much. It becomes too complicated,” he said.
ABN AMRO INGChief Executive Steven van Rijswijk agreed that the EU needs to simplify and harmonize regulations to boost investment and labor productivity, a growing problem on the continent.
“There needs to be a lot of investment in infrastructure, a lot of investment in Europe’s strategic autonomy in terms of technology infrastructure, these are things that need to be stimulated,” he said.
Coping with Europe’s “Regulation First” Approach
The EU is one of the most highly regulated business environments in the world and often prides itself on being the first to set guidelines for industry governance and consumer protection.
However, Swedish Telecom CEO Borje Ekholm EricssonSaid that Europe’s “regulation first approach” has no merit and believes that it is curbing technological progress.
“I don’t think you can be a leader in regulation, I don’t think it creates value,” he said. “You have to be a leader in innovation and you need a framework that supports innovation. That’s where the United States is really successful – Europe needs that.”
European policymakers appear to recognize the need for innovation and deregulation in the face of increasing economic competition and confrontation from the United States and China, but so far have been slow to act.
zurich insurance CEO Mario Greco said Europe needs to “wake up” if it is to compete with other global markets, especially with a new U.S. administration in office.
“Europe is always lagging behind. It is always busy with itself,” he said.
“In a fast-moving, innovative world, this is once again a wake-up call for Europe,” he added.
Swiss pharmaceutical company NovartisChief executive Vas Narasimhan agreed that now was an “important moment” for Europe, arguing that the EU faced a fork in the road that would lead to two distinct outcomes.
“Europe must now decide – in a world where the United States is deregulating so aggressively and trying to become more competitive – whether Europe will continue to sit on the sidelines and continue to strengthen regulation by the European Commission and strengthen regulation in various countries. Or will we finally get a European A more conducive environment for competition and innovation?
“We’ll have to wait and see. History shows that while there’s a lot of talk, the committee doesn’t take a lot of action. And now, this is the moment.”
Barclays Chief Executive CS Venkatakrishnan is one of the more optimistic chief executives about efforts to boost weak economic growth in Britain and Europe.
“Obviously, the U.S. has implemented a lot of controls and regulations over the past few years, and we think those measures will be relaxed. That’s generally good for business confidence and business opportunities,” he said.
“We think these winds are blowing towards Europe and the UK, where you see governments taking a look at what’s going on in the US and trying to understand where they should deregulate.”
“People can be hopeful,” he added.
