EU Commission: How Brussels wants to trigger a startup hype

Brussels. The EU Commission presented ambitious plans on Wednesday to trigger a startup hype in Europe. The goal is to keep emerging companies in the EU and prevent them from moving, especially to the US. To this end, the Commission plans to launch an investment fund with private investors that will specifically support promising startups during their growth phase.

"Companies founded in Europe must also grow in Europe," says EU Commissioner Stéphane Séjourné. "We are reducing bureaucracy, making it easier for startups to access finance, and improving their opportunities to do business in our single market."

The growth fund is expected to have a volume of €20 billion. It will be cross-sectoral but will also support new companies in key technologies and strategically important areas, such as biotechnology and quantum technology. "With the EU Commission at the table, Europe's economic independence will also be incorporated into the investment strategy," emphasized an EU official.

In addition to financing, the Commission wants to make Europe more attractive to top talent and create a more innovation-friendly environment. One problem so far has been that most capital in Europe is concentrated in banks, and these banks are often risk-averse. "There is seven times less venture capital in the EU than in the US," said the EU official. The result: When up-and-coming startups want to grow, investors from the US and China lure them with generous capital, and many startups are moving out of Europe.

Because many startups emerge from university research projects, Brussels is also planning to improve networking among universities. Simplified licensing models, revenue sharing for academic institutions, and targeted commercialization support are intended to encourage more startups to emerge from the university environment. Access to technology and research infrastructure is also to be facilitated to shorten the time to market.

As early as the beginning of next year, the EU plans to propose a so-called "28th Regime" – a virtual, extraterritorial model designed to offer particularly favorable conditions for startups. With simplified insolvency, labor, and tax laws, founders could launch a company within 48 hours and scale faster.

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But this very plan is meeting with sharp criticism from the unions. UNI Europa, the umbrella organization of European service unions, warns of a sell-out of workers' rights: The 28th regime would enable companies to circumvent national laws and create "second-class labor legislation," said chairman Oliver Roethig to the RedaktionsNetzwerk Deutschland (RND). He is reminded of a 20-year-old idea: Back then, EU Commissioner Frits Bolkestein wanted to allow companies to provide services in other EU countries under the working conditions of their home country, which would have led to massive social dumping. Roethig is calling on the Commission to exempt labor and social rights legislation from its strategy. "Otherwise, the European trade union movement will bring hundreds of thousands of people onto the streets—as it did when we defeated the Bolkestein Directive," he told the RND.

A high-ranking representative of the EU Commission left open how exactly labor law would be structured under the 28th regime. It was "still too early for details," he said.

CSU European politician Angelika Niebler praised the Commission's proposals. "Better EU framework conditions will also help make Bavaria and all of Germany even more attractive for young companies," she said. Now, however, it is up to the member states to put this strategy into practice.