Simplification ‘spectacle': a diversion from Europe's complex investment challenges
When it comes to the barriers the green transition faces, reporting rules and administrative friction are a fraction of the tip of the iceberg, argue Lukas Bertram and Christian van Ballegooy.
This opinion piece was first published in Table.Media.
The simplification push, to reduce so-called ‘regulatory burden’ and unlock private capital, is dominating – and dividing – Brussels. More than half of the European Commission’s new legislative initiatives in 2026 will be dedicated to rolling back existing regulations with the aim of saving 8.6 billion euro per year in costs for businesses.
But Europe’s investment gap for the clean transition runs in the hundreds of billions annually. The maximum savings achievable through simplification are negligible. And this is before we account for the non-financial costs to the credibility and reputation of the EU and its institutions.
Last week Executive Vice-President in charge of competitiveness and the clean transition, Teresa Ribera, described the process as “a terrible political spectacle”. “It’s a kind of Trumpist approach against being stable, reliable and predictable”, she warned.
This split at the highest level of the EU executive is mirrored in the parliament. The first of the ‘omnibus’ packages exposed deep political fractures with centrist MEPs siding with the far right in a historic breach of the cordon sanitaire. On top of this the European Ombudswoman found that the Commission had short-circuited key procedures and not followed its own rules for good law-making on Omnibus I. In an environment where the EU must convince investors of its long-term direction, such perceptions matter.
With more political divisions and legal challenges likely, the EU’s simplification agenda risks consuming vast amounts of energy and political capital – all for little return.
Europe needs to mobilise and redirect private capital at unprecedented scale to modernise its economy and meet its climate objectives. When it comes to the barriers it faces, reporting rules and administrative friction are a fraction of the tip of the iceberg.
In his report on the future of Europe’s competitiveness last year Mario Draghi diagnosed a range of structural issues. While acknowledging the need to reduce regulatory burden for European companies, Draghi highlighted broader constraints such as demand side issues, electricity prices, and patchy implementation of industrial policy.
Draghi recently warned, “Europe has fallen into two traps: uncoordinated national efforts, or blind faith that market forces will build new sectors”.
One area where these traps are clearly visible is industrial electrification. This is a cornerstone of Europe’s climate and long-term competitiveness vision, yet progress is uneven and too slow for both its 2030 and 2050 emissions targets. Research shows that ‘electrification readiness’ varies sharply across regions. The regions facing the highest hurdles have limited access to finance, high financing costs and fossil-dependent grids. Removing ‘regulatory burden’ will do little for these regions which require significant and diverse public support to get industrial electrification underway.
Deeper-rooted issues further compound the challenge. Technological acceptance remains low, with many firms reluctant to move away from legacy systems even when cleaner alternatives are viable. Short-term thinking, knowledge gaps, ingrained company culture and political hesitation all contribute to the inertia.
Looking at the financial system we can observe other below-the-surface problem areas that needs to be part of the conversation too. The world’s largest banks still allocate roughly twice as much capital to fossil-based activities as to sustainable power generation. This reflects ingrained expectations about risk, return, and decision-making time horizons. As long as value is primarily defined through short-term profitability, capital will continue flowing towards incumbent technologies rather than the business models and clean technologies of tomorrow.
In short, Europe needs a ‘whole-of-the-iceberg’ approach: one that not only addresses financial profitability concerns and implementation challenges, but also the underlying assumptions about risk, value and technological change that shape decisions.
And because regional realities differ so starkly, this approach must be coordinated yet sophisticated enough to reflect Europe’s regional diversity.
Europe does not lack ideas. ZOE Institute has identified more than 100 policy solutions to overcome different levels of investment barrier. But treating simplification as the main lever risks creating a spectacle that diverts attention from the complexity of the transition and the full range of actions Europe needs to take.
If Europe is to build clean, resilient industries it needs much more than a slimmed-down rulebook. It needs a systemic approach to directing investment into the technologies and infrastructures of a future-fit economy.
