FINANCIAL TIMES Interview with Enrico Letta
11 february 2024, Niklas Uder
Enrico Letta, former Italian Prime Minister and President of the Jaques Delors Institute, provided an insight to the FINANCIAL TIMES into his report on the single market when he said “I’m trying to work on how to have solutions like the 28th regime”.
On 24 June 2023, the European Council called for the “presentation of an independent high-level report on the future of the single market”. In consultation with the Spanish Council Presidency and the European Commission, Belgian Prime Minister Alexander de Croo commissioned former Italian Council President Letta to draw up the report. The European Council invited the Commission to take Letta’s work forward in consultation with the Member States. The report is to be presented at the EU summit in Brussels in March 2024.
The “Holy Grail” of Letta’s project, he says in the interview with Martin Sandbu, published on 8 february 2024 in the FT, is to find out “how to scale without killing the Four Freedoms”: the free movement of goods, services, capital and people that together define the single market. In part this requires more integration and common regulation – Letta points to the EU’s AI Act as the sort of thing that is necessary to avoid a patchwork of 27 different sets of rules that would make it harder for tech innovators to scale up. It also means “working on the enforcement. That is, in my view, one of the main issues of the single market”, he says. Then there is the question of how to integrate corporate law across EU member states. “It’s very difficult for a [small or medium-size business] to say, OK, I work in 27 different languages, 27 [systems of] business law, 27 taxation systems… you don’t have a legal office of 50 people allowing you to. So I’m trying to work on how to have solutions like the 28th regime”. A “28th regime” is a bold idea. It refers to a separate layer of corporate law, legislated at EU level and available to companies to choose to incorporate under.
“If this were made simple, predictable and attractive, it could be a superior alternative to harmonisation of national rules, which could remain but would no longer present an obstacle to scaling.”
As president of the Jaques Delors Institut, Letta has had a lot to do with the famed father of the single market, remaining in conversation with him until Delors‘ death at the end of last year. “The main point he underlined was the fact that when he launched the single market, the world was simple and Europe was simple. [Today] Europe is bigger, and the world is very complex”.
It is not the first time the FINANCIAL TIMES has raised the issue of an additional business law regime to increase economy.
In 2019, the FINANCIAL TIMES, highlighted the article “How a pan-EU insolvency regime could advance banking union” in reference to the prevention of financial crisis. An alternative to harmonising national rules is to add a layer of common rules on top of them. Albert Bravo-Biosca, an economist at the innovation think-tank Nesta, advocates a “european layer”. That would include pan-European insolvency and bankruptcy rules that companies would have the option to follow instead of their national laws. Mr Bravo-Biosca’s proposals, which were presented to eurozone finance ministers at the time, are not specifically designed for banking but “I would imagine the banking sector would be relatively easier”, he says. Already “some banks are regulated at the European level. It is clear from the euro crisis that if you want banking union to work, changes need to be made”.
Link to the article of the FINANCIAL TIMES, published on 8 february 2024: https://www.ft.com/content/13d6ca67-eebb-4ea7-939b-1d03fec68b81
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