Invited by the Chamber of Commerce for its back-to-school event, Enrico Letta stressed the urgent need to build a competitive and innovative Europe. Letta is responsible for a report on the future of the single market, published in 2024 and adopted by the European Council. For him, the single market is the key to the continent’s future. And while reports of this kind are often overlooked, its author can take heart from the fact that, during the State of the European Union address delivered by European Commission President Ursula von der Leyen on 10 September, she made the “important and strict” commitment to complete the single market by 2028.
“This is a very important commitment,” commented Letta, “because today, in key sectors such as financial services, energy, connectivity, innovation, tech and telecoms, we have 27 different markets that do not communicate with each other. This fragmentation is the main cause of Europe’s lack of competitiveness. Europe needs to be defragmented!”
The European researcher, a rare species
And this situation explains for Letta the absence of the “European researcher” or more broadly a genuine European innovation and research market. “The higher education and research system lacks mutual recognition of diplomas, severely limiting the mobility of researchers and leading to a Europe that exports its best researchers. European startups, although born in Europe, are often forced to turn to the United States for their development because of the integration and size of their financial market, as well as their ability to attract capital for innovation.”
Another shortcoming of the European research and innovation ecosystem: the lack of private investment. “While European public investment is comparable to that in the United States, the level of private investment is insufficient compared to the Americans. This difference is crucial, because private investment is the key to success in areas such as artificial intelligence and space in the United States. The fragmentation of European markets does not allow the critical mass necessary to generate this level of investment to be achieved.”
In order to close this gap, he suggests reviewing Europe’s culture of failure. “In the United States, success in innovation often comes after several failed attempts, and failure is not considered a cardinal sin without repentance.”
Saving to innovate
On financing, Letta has high hopes for the savings and investment union--a union that would be for the European Union, “the equivalent of the 1992 revolution that saw the four major European freedoms--the free movement of goods, people, services and capital--enshrined.”
The objective for him is to enable the creation of bridges between savings and investment, “bridges that do not currently exist.” He added: “This means creating tax incentives and more attractive savings products at European level to direct savings towards investment, thus preventing European capital from leaving for the United States.”
With regard to support for innovative companies, Letta calls for the deployment and use of the ‘28th regime’ to be speeded up. This regime offers an optional legal framework proposed by the European Union for companies, particularly innovative companies, operating across the EU to simplify access to the single market by offering a harmonised and simple set of rules. “It’s not about forcing member states to abandon their own standards, but about giving businesses a choice.” The European Commission is expected to propose a draft in the first quarter of 2026.
Globally, to speed up the creation of the single market, Letta advocates the use of regulations--texts that apply immediately--rather than directives that have to be transposed and leave too much latitude to the states. “Regulations facilitate a level playing field.”
This article in French.