Restart Europe’s Innovation Engine

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The European Central Bank recently published an article titled “Europe has strengths it can build on”. It starts with:

Europe must act. Our competitiveness is at risk. While a global revolution in artificial intelligence unfolds, the EU could find itself on the sidelines. Our traditional manufacturing champions are losing global market share. Geopolitical shifts are turning dependencies into vulnerabilities and burdening our companies with high energy prices.

Europe must and will find its place in this new world. The prospects for our continent are better than they might seem. The EU has strengths on which it can build – and it has a plan to fix its weaknesses.

Just like many other European businesses owners, I am worried about the EU’s lack of steps to improve innovation and entrepreneurship. Here are some ideas:

Tax exemption for small businesses and solopreneurs

If you're making under €500K a year in net income as a small business, you shouldn't have to pay corporate tax. The income should be taxed directly through personal income tax, eliminating the double taxation and complex accounting requirements. This would make entrepreneurship more accessible and reduce the bureaucratic burden on small businesses.

Fix capital and equity access

Europe lags behind in two critical areas: access to growth capital and equity distribution. While US startups can easily raise funds from diverse sources and use stock options to attract talent, European founders face significant barriers. Securities laws vary by member state, the tax treatment of employee stock options is prohibitive, and issuing shares across borders remains an administrative nightmare.

The result: European startups struggle to scale, and talent flows to markets where equity compensation actually works. Harmonizing securities laws and modernizing equity regulations across the EU would remove these artificial barriers to growth.

From protection to production

The US is vastly more productive than the EU, and that gap is widening. Why? Because while European courts and unions debate how to preserve yesterday's jobs, American entrepreneurs are building tomorrow's companies. Our “worker protection” rules have become a protection racket that benefits insiders while locking out innovation and growth.

The solution is simple but requires political courage: make it as easy to start, scale, and restructure a company in Europe as it is in America. That means ending the bureaucratic maze of labor courts, months-long termination procedures, and union vetoes that strangle young companies before they can grow.

Kill the innovation theater

Innovation hubs, startup initiatives, and government accelerators are just theater if we don't fix the basics. A founder doesn't need another networking event — they need functional banking (where opening an account doesn't take months due to KYC bureaucracy), quick hiring, clear regulations, and access to capital. Stop the PR shows and start the real reforms.

Modernize EU notaries

The current notary system is a protected monopoly charging premium fees for basic document processing. While other sectors have digitized, notaries still command high fees for what's essentially administrative work. The path forward is clear: implement price caps on standard documents, fully legalize digital notary services, and mandate acceptance of e-signatures across all EU member states. We're paying 19th-century prices for services that should be as simple as a mobile app. This isn't just about convenience — it's about removing unnecessary costs and friction from business operations.

Radically simplify tax codes

EU tax regulations have become a labyrinth of contradictory rules across member states. The solution isn't adding more patches — it's a complete rewrite. Start fresh, cut the code to 10% of its current size, and focus on what matters: clear, consistent rules that work across borders.

A simplified tax code wouldn't just help businesses — it would enable modern IT systems to replace the patchwork of legacy software built on decades of complexity. We don't need better navigation through the maze — we need to rebuild it with fewer walls.