EU failing to implement economic fixes as single market withers

Good morning. As EU leaders put together to satisfy this week to debate tips on how to urgently enhance the bloc’s moribund financial system, we reveal immediately that progress on already-identified treatments has been woeful. And we report on a name from the European parliament for the EU’s antitrust chief to take a more in-depth curiosity in Netflix’s proposed takeover of Warner Bros Discovery.

Self-inflicted demise

The EU is transferring at a snail’s tempo in the direction of enhancing its financial system and following the suggestions of a landmark report on competitiveness, in response to an audit of latest laws seen by Alice Hancock.

Context: In September 2024 former ECB president and Italian ex-premier Mario Draghi published a report with 383 suggestions for the EU to save lots of its financial system from the “sluggish agony” of waning competitiveness on the worldwide stage.

That report turned the compass for Ursula von der Leyen’s second time period as European Fee president. However progress just isn’t trying good.

Analysis by the European Coverage Innovation Council exhibits that solely 15 per cent of Draghi’s suggestions have been totally carried out, up from simply 11 per cent in September.

Virtually two-thirds stay both in progress or haven’t been carried out in any respect, in response to the report, which has parsed the EU rule e book and mapped it towards Draghi’s publication.

The areas with most progress had been these which were impacted “by sturdy exterior stress”, resembling defence or commerce, the authors stated.

EU Council president António Costa will host a “retreat” on Thursday for EU leaders to debate the one market and competitiveness, and has invited Draghi and fellow former Italian premier Enrico Letta, who additionally penned a survey of the one market in 2024.

In a letter to Costa seen by the FT, the liberal Renew group within the European parliament stated that “our collective try and keep away from Europe’s ‘sluggish agony’ has been, nicely, sluggish”.

Additionally they famous that whereas the EU was “horrified” by US President Donald Trump’s aggressive tariff regime, “we appear to be unusually complacent in regards to the ‘inner tariffs’ we self-inflict” by obstacles inside the one market.

“If we carried out Draghi . . . with half the vitality with which we always discuss Trump, we’d quickly don’t have any cause to speak about him in any respect,” stated Renew vice-president João Cotrim de Figueiredo.

EU ambassadors met von der Leyen for lunch on Friday. Many current instructed the FT they fear that talks on enhancing the one market have been hijacked by parallel discussions about decreasing the bloc’s exterior dependencies through controversial “Buy European” measures, favoured notably by France.

French President Emmanuel Macron will attend an trade summit in Antwerp together with German Chancellor Friedrich Merz and von der Leyen on Wednesday.

A draft declaration for that summit reads: “The Draghi report has not been carried out. The scenario is worse than a yr in the past and the subsequent 5 years would be the most difficult years for Europe’s trade in lots of a long time.”

Chart du jour: Finish of the affair

The latest unravelling of transatlantic ties has come as a profound shock in Germany, where the bond with the US runs deep.

Mergers within the stream

An influential lawmaker has warned in regards to the penalties of Netflix’s potential takeover of media conglomerate Warner Bros Discovery, calling on the EU’s competitors chief to maintain a detailed eye, writes Barbara Moens.

Context: Streaming service Netflix and US movie studio Paramount are locked in a fierce battle to accumulate Warner Bros Discovery, certainly one of Hollywood’s oldest studios. WBD’s board has rejected Paramount’s bid for the complete firm, and prefers Netflix’s supply to purchase simply its studio and streaming enterprise.

Each Paramount and Netflix are actually attempting to persuade American and European regulators to get their blessing for an eventual acquisition, with Netflix already facing a US authorities antitrust evaluation. 

EU centre-right lawmaker Andreas Schwab has now raised issues a couple of attainable Netflix takeover with the bloc’s competitors chief Teresa Ribera, who could be accountable for greenlighting the merger on the European aspect.

Consolidation within the streaming market “could scale back shopper selection, weaken incentives to maintain high quality and innovation, improve subscription costs, and increase the size and scope of consumer information assortment”, Schwab wrote in a letter to Ribera seen by the FT.

Schwab didn’t point out Paramount in his letter, specializing in Netflix’s dominance in streaming as a substitute. He additionally warned about potential penalties for European cultural variety and unbiased manufacturing ecosystems.

Netflix declined to touch upon the letter.

Final month, the streaming large stated it was still confident it might achieve regulatory approval. Netflix co-chief government Ted Sarandos additionally highlighted the corporate’s comparatively low share of TV time within the US, in a preview of doubtless arguments it is going to make to get the inexperienced mild.

What to observe immediately

1. European parliament plenary session begins in Strasbourg.

2. EU Council president António Costa meets Albanian premier Edi Rama.

Now learn these

• Priceless: Europe “urgently” wants to scale back its reliance on Visa and Mastercard as US relations fray, the top of a banking alliance has stated.

• Becoming a member of forces: Brussels will attempt to breathe recent life into its decade-long marketing campaign to create a common deposit insurance scheme for EU banks.

• Discovering their mojo: Patrick Jenkins outlines how three European banks are bouncing back after a long time of their US rivals’ shadow.