Europe must “wake up” and become more competitive in the Trump 2.0 era

European business leaders warned on Tuesday that the region risks falling behind its U.S. and Asian peers if it fails to innovate and adapt to a rapidly changing world, with global policy changes expected to accelerate during President Donald Trump’s second term.

Europe’s chief executive, Mario Greco, said Europe “always lags behind” its Asian and U.S. peers when it comes to innovation. zurich insurancetold CNBC at the World Economic Forum in Davos, Switzerland.

“In a fast-moving, innovative world, this is once again a wake-up call for Europe. I hope Europe takes it seriously,” Greco said.

“Take for example all the developments in artificial intelligence and digital. Europe is not investing in this in the same way that the US and China are. It’s also the integration of European financial markets. There remains (the question of) how complex it is. Just doing business in Europe … That’s why I say it again, Europe needs to wake up,” Greco added.

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Greco added that Europe is too focused on regulation, which is stifling progress, especially in the new technologies needed to drive growth – something that means for the region as we enter the Trump 2.0 era of “America First” policies will need to further defend its policies. economic benefits.

President Donald Trump signed series of executive orders He took a series of steps on his first day in office on Monday, including withdrawing from the Paris climate agreement, revoking the 50% electric vehicle target and cracking down on immigration.

On the global front, in addition to pointing out 25% tariffs could be imposed on Mexico and Canada as early as FebruaryLater, Trump also issued a warning signal, saying that the EU needs to buy more US goods, as well as oil and natural gas, otherwise it will become a target of tariffs.

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Novartis CEO Vas Narasimhan told CNBC that the Trump 2.0 era is “an important moment for Europe,” during which the region needs to deregulate and become more competitive.

“Europe must now decide whether, in a world where the United States is deregulating so aggressively and trying to be more competitive, Europe will continue to stand by and continue to tighten regulation on the (European) Commission, on individual countries, or whether we will ultimately Will we get a more competitive and innovative environment in Europe?” he asked.

“We have to wait and see. History shows that while there is a lot of talk, the (European) Commission doesn’t take a lot of action. And now, this is the moment. Because, if we don’t do that, I think Europe will be compared to the United States and we will further behind,” he said.

Improve competitiveness

Faced with increasing economic competition and competition from the United States and China, European policymakers appear to be aware of the urgent need for innovation and deregulation.

“The new Trump administration should be a wake-up call for Europe,” Belgian Finance Minister Vincent van Petegem said, Reuters reported on Monday. “We should not focus on retaliation (against U.S. tariffs) but on Europe’s challenges — the loss of competitiveness and the widening productivity gap we face,” he said.

ING CEO Steven van Rijswijk said Europe needs more streamlined and harmonized regulation across the EU to improve competitiveness and labor productivity, which is a growing problem on the continent. He noted that more investment is needed.

ING CEO says Europe needs to become 'more competitive, more productive'

“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 told CNBC on the sidelines of the World Economic Forum.

Santander executive chairman Ana Botín told a panel discussion on the future of growth that governments need to put in place frameworks to “kick-start growth in the right way and redistribute (and) think about the implications of artificial intelligence “.

“We are not a museum,” she said of Europe. “We are at risk of becoming a museum. But who developed the latest vaccine? A lot of the innovation actually happened in Europe. We have a huge number of start-ups, and the problem is that they start here and then go to the United States.”