27 January 2025 – Has the EU Green Deal come to an end? A leaked document from the EU Commission suggests that the EU Green Deal in its current form has come to an end and that the competitiveness of European companies is once again at the centre of political attention. Global trade on course for growth and optimism in the eurozone: economy on course for recovery.
Global trade on course for growth
Current developments in global trade are showing positive signs: freight rates have fallen significantly, which is revitalising global trade. The forecast by the World Trade Organisation, which expects trade to grow by three percent in 2025, is particularly encouraging. Despite protectionist measures, supply chains remain stable, as confirmed by the FED New York Global Supply Chain Index. Shipping is also becoming cheaper for companies, which should further boost trade and the economy. A dynamic start to the year will be supported by the Chinese New Year and improved trading conditions – good prospects for the global economy!
Optimism in the eurozone: economy on the road to recovery
Sentiment in the eurozone is showing signs of recovery: The Purchasing Managers’ Index surprisingly rose to 50.2 points in January, signalling growth for the first time in months. Particularly pleasing: industry reached its highest level for eight months, a sign of stabilisation and recovery. The index also climbed to 50.1 points in Germany, signalling an end to the contraction phase. The euro showed strength and surpassed the USD 1.05 mark, underlining confidence in economic development. Overall, there are signs of positive momentum, which inspires optimism for the coming months.
Leak: End of the EU Green Deal near?
The leaked draft of a confidential report by the European Commission on easing the burden on the domestic economy shows that the EU Green Deal in its current form is likely to be largely history.
One of the first sentences in the document available to us already indicates the future direction of EU economic policy:
‘The transition to a decarbonised economy must be competitiveness-friendly and technology neutral…’
The EU Green Deal was already no longer mentioned in Ursula von der Leyen’s Davos World Economic Forum speech last week. And a Dutch newspaper reported on possible manipulation of the EU Green Deal.
SMEs should benefit from a massive reduction in bureaucracy
The Commission paper not only proposes a 35% reduction in reporting obligations for SMEs, but the Commission also wants to significantly reduce bureaucracy in other areas. In addition, a new category of companies – so-called small mid-caps – is to be created, which, together with SMEs, are to benefit from customised regulatory simplifications. A new competition check in EC impact assessments should also take better account of SMEs. In our view, however, these can only be minimum requirements, especially for SMEs. A reduction in bureaucracy for SME of at least 50% should therefore be set as a benchmark target.
Two other important points that should be addressed in 2025 are the CBAM carbon border tax project, which is now on the back burner, and a Steel and Metal Action Plan.
CBAM review in 2025 – EU Green Deal Carbon Border Tax on the brink?
According to the Commission, the EU Green Deal market protection measure CBAM is to be reviewed in order to provide European companies with a level playing field and at the same time maintain the competitiveness of EU industry. The European People’s Party (EPP) recently called for the introduction of CBAM to be postponed by at least two years.
‘implementation of the CSRD and the CSDDD, as well as related legislation including the taxonomy regulation and the Carbon Border Adjustment Mechanism (CBAM) should be put on hold for at least two years. In that time, an omnibus regulation should limit the scope of these laws to the largest companies with more than 1000 employees, eliminate the indirect effect to SMEs’
End the serious neglect of SMEs immediately!
We are of course pleased that SMEs have moved a little more into the focus of political decision-makers. However, it remains necessary for this to happen on a much larger scale and for the European Commission, which has so seriously neglected SMEs in recent years, to be scrutinised in this regard. It is now particularly important that Brussels and Strasbourg do not allow themselves to be distracted or intimidated again by the untrustworthy clamour of some lobby associations of large individual players.
In this context in particular, we consider the election campaign slogan of the German Liberals to be extremely commendable. ‘Everything can be changed!’ – and we would add: ‘Now is the time!’
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