EU–INC – A new pan-European legal entity

Since it's inception in 1993, not a single global top 100 company have been created by any of the EU countries so the struggle is real.

However I would strongly caution against thinking that reducing paperwork to set up your company is somehow going to magically solve any of the fundamental problems with EUs ability to create sector dominating companies. But even if we assumed it would, that just means that the bigger companies now have even more leverage.

The real problem is deeper. It's about how EU is designed and structured. EU was created as a way to harmonize and standardize regulation between member countries to make trade simpler. (Anyone remember the cucumber directive)

However as technology have improved and manufacturing started supporting a much more bespoke and customized world, the union started started looking at other forms of regulation that went deeper, each step: expanded central authority and reduced national discretion

We've seen things like one EU Patent court, GDPR, Cookie Law, AI Act, monetary currency all attempts at improving the efficiency of the single market, in reality, none of that have changed the fact that the EU still have not created a single industry leader since it's inception.

It's simply impossible to create a SpaceX, Tesla, Uber, OpenAI, Nvdia, Airbnb, even X, Linkedin or Facebook in Europe, not because of bureaucracy but because of the following 3 things:

1. EU tries to solve problems politically and centrally that startups are much better at solving locally 2. EU utilizes the extreme caution principle on everything and thus end up creating an extreme risk averse approach to what is allowed and what isn't. In effect startups end up creating businesses that the EU allow, rather than what the market need. 3. It's very hard for anyone let alone a startup to challenge the EU regulative system. Yet anyone of the above mentioned companies have constant battles with regulation and legislation. Even those companies can't really win over the EU regulative system, now try and be a startup trying to challenge som of the regulation, good luck.

Europe have plenty of talent and plenty of problems that the startup world could help solve, but as long as the EU politicians compete with their own startup environment at solving these problems no amount of bureaucratic easing is going allow for the full potential of the European talent base.

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Well, in the logistics department there is definitely more freedom. But it's not as much as you would think. You can ship stuff easily, travel easily, and send money easily, but at the end of the day, you'll have to submit to the government bureaucracy of each specific country with no real unifying logic and not even a shared language. Technically, English is used everywhere (even though, ironically, the English are not even part of the EU anymore), but you can't really rely on it to get anything done locally in small cities. If you want to move in the middle of France, good luck trying to deal with the bureaucrats in English for example.

Then the freedom was a pretext to do a lot of social dumping. If you ask the workers of the Renault plant that got displaced in the east because of lower labor costs, they won't have a lot of good things to say about this freedom. I know a trucker who somewhat hates Poles, not because he has anything against them particularly but because they engage in social dumping by competing for work in France while only following laws from Poland. A Frenchman living in France can never be competitive with that because he has to pay a lot more in taxes and follows the French laws.

Germany engages in regulatory warfare for electricity. They are ideologically against nuclear and imposed renewables as the only solution (while burning a shit ton of coal/gas). Since their approach is very costly and not reliable, they imposed regulation on the European electricity to make the cheaper French nuclear electricity less competitive. That wasn't enough, so even though they don't have nuclear anymore, they forced themselves into the Flamanville project and imposed their insane regulation (via Siemens), which is the major reason it took so long. This is industrial sabotage and engaging in bad-faith collaboration. And now we have to sell them winter electricity on the cheap while they offload their summer electricity that literally nobody wants. It's impossible to not hate them for it, since electricity prices have risen tremendously for the end consumer. The crazy part is that it completely undermined the supposed goal of lowering emission (people went back to heating with wood-burning and paraffin/kerosene stoves).

Spain floods the market with cheap fruits/vegetables that are much cheaper not only because of geographical comparative advantages but also because they import cheap seasonal labor from North Africa, often not respecting labor rules (that much became obvious in the COVID crisis).

Italy wants to leave because they are going down the fascist path they already took a while ago.

Lidl, a German supermarket chain, sells cheap Chinese-made tools in their stores under the pretense of German quality. But since the rise of platforms like AliExpress/Temu, consumers have had access to similar items for even cheaper because they allow cutting out the middleman. Unsurprisingly, the EU ruled that now consumers have to pay taxes on the items they buy directly from China. Freedom is OK only when it is the powerful that can fill their pocket after engaging in rampant social dumping. For now, China has settled on shipping stuff to a warehouse located in Eastern Europe and dispatching it from here, basically using a regulatory loophole that allows them to pay the cheapest amount of taxes.

I could go on and on, but the reality is that the EU has largely impoverished and weakened most of its constituent countries. It doesn't look that way for now, because everything has been paid for with unsustainable debt. But now the invoice is being presented to the young generations. The EU can't even manage to make a common army or apply regulation uniformly across countries (look at the labels on products).

All it has done is create unfair competition that benefits the powerful first and foremost. So yeah, you can travel freely, but who cares? In my youth I traveled in many EU countries before it was open like that. Stopping at customs and having to exchange currency was inconvenient, but improving those mild problems is definitely not worth the massive amount of exploitation and dissent that has resulted.

The EU is the same ideological enterprise as the USSR, and the same problems that are linked to a massive bureaucracy are now showing up. You just cannot force different groups to adopt the same rules/behaviors because there are too many cultural differences. Values are too far apart, and the environment/advantages are too different. Germany likes the EU a lot because they have outsized political power in it and are the ones who profit the most: they get access to cheap eastern labor/resources while being able to sell in the rich markets of their neighbors on the other side.

We may enjoy the freedom while it lasts, because the EU is under attack from all fronts. Russia is waging a real war, China is engaging in economic warfare and the US is pulling out military support to gain resources. The constituent countries are not any stronger, and in fact, they have weakened their position on many fronts. Fighting together is illusory because the interests/incentives are more often opposed than aligned.

It is complicated and has multiple dimensions. For example it also leads to workers not switching Job away from an employer as quickly.

It's also interesting how it plays together with social benefits: As it is hard to fire people, hire&fire isn't an approach, thus companies keep workers longer during a downturn, thus when they let go there is more budget for social security.

Also the effects of having works council representatives on the board might lead to decisions not tied to the quarterly results, but long-term stability.

This all of course makes it harder to do experiments, build up a business unit to see if an idea might work ...

As a worker it is quite good and the model worked quite well for large parts of the 20th century. With global competition (for many jobs exact location doesn't matter) it could be a factor which plays a role in being late with digital stuff.

This is admirable but the process in Germany right now is overly burdensome. It probably does weed out some bad actors (and good actors) not because of the documents required or any sort of checks performed, but because it takes months and costs thousands of euros.