US President Donald Trump delivers his inaugural address after being sworn in as the 47th President of the United States in the Rotunda of the US Capitol on January 20, 2025 in Washington, DC.
Chip Somodevilla | Afp | Getty Images
European CEOs appear to be watching with envy as President Donald Trump rolled back a raft of regulations on Monday, with a growing chorus of voices calling for similar moves on the continent.
Trump wasted no time on his first day in office, announcing the streak executive orders designed to support key industries, including curbing electric vehicle production targets and accelerating oil and gas production.
The returning president has long argued that regulation stifles US innovation and competitiveness, campaigning for a second term on promises to cut red tape. And, faced with a more aggressive US and increased global rivalry, European business leaders are echoing that view.
Morten Wierod, CEO of a Swiss robotics company ABBhe warned that excessive regulation and the associated high costs are forcing frontier companies to move to other markets, which ultimately puts the “de-industrialization of Europe” at risk.
“There needs to be a clear regulatory reset and let business get on with it,” Wierod told CNBC’s “Squawk Box Europe” at the World Economic Forum in Davos, Switzerland.
Wierod added that European Union regulations, while often well-intentioned, have become too bureaucratic and need to be simplified to give companies the flexibility they need to innovate and grow.
“Every regulation is put in place with good intentions. But when you take it all together, it just becomes too much. It becomes too complex,” he said.
Dutch bank INGChief executive Steven van Rijswijk agreed the bloc needed to simplify and harmonize regulation to boost investment and labor productivity, a growing drag on the continent.
“A lot needs to be invested in infrastructure, a lot needs to be invested in Europe’s strategic autonomy when it comes to technological infrastructure, these are things that need to be stimulated,” he said.
Addressing the European ‘regulatory first’ approach
The EU has one of the strictest regulatory business environments globally, often taking pride in being a first mover in developing industry governance and consumer protection guidelines.
However, Borje Ekholm, CEO of a Swedish telecom company Ericssonhe said there was no merit in Europe’s “regulatory approach”, arguing that it was limiting technological progress.
“I don’t think you can be a leader in regulation, I don’t think that creates value,” he said. “Where you have to be a leader is innovation, you need a framework that supports innovation. That’s where the US has been really successful – Europe needs that.”
European policymakers appear to be aware of the need for innovation and deregulation in light of growing economic competition and rivalry from the US and China, but have so far been slow to do so.
Zurich insurance CEO Mario Greco said Europe must “wake up” if it is to compete with other global markets, especially now with the new US administration in power.
“Europe is always lagging behind. It is always busy with itself,” he said.
“In a world that is moving forward very quickly, with a lot of innovation, it is again a wake-up call for Europe,” he added.
Swiss pharmaceutical company NovartisChief executive Vas Narasimhan agreed that now was a “big moment” for Europe, arguing that the bloc faces a fork in the road with two quite different outcomes.
“Europe must now decide – in a world where the US is deregulating so strongly and trying to increase competitiveness – whether Europe will continue to sit idly by, continue to increase regulation in the Commission, increase regulation in various individual countries. Or will we finally get an environment that is more pro- competitive, pro-innovative in Europe,” he said.
“We’ll have to see. History suggests that while there’s a lot of talk, the Commission doesn’t take much action. And right now, this is the moment.”
One executive who expressed more optimism that the UK and wider Europe could emulate the US to boost sluggish economic growth was Barclays CS Venkatakrishnan.
“Obviously there are a lot of them [U.S.] control and regulation that has been put in place over the last few years, and we think that will be eased. That’s generally good for business sentiment and good for business opportunities.”
“And we think those winds are blowing towards Europe and the UK, where you can see governments understanding what’s going on in the US and trying to see what aspects of their own regulation they should relax.”
“One can hope,” he added.
