Denmark Calls for EU Deregulation to Boost Competitiveness

Danish Foreign Minister Lars Løkke Rasmussen has asserted that the European Union’s ongoing deregulation efforts are not solely an attempt to appease Washington. Speaking in Horsens, Denmark, he emphasized that the EU must prioritize its own interests while maintaining independence from U.S. influence. Rasmussen’s comments came ahead of an important meeting of EU leaders, where the topic of deregulation is expected to dominate discussions.

In an exclusive interview with POLITICO, Rasmussen likened the EU’s approach to a “Kinder egg,” suggesting that deregulation serves multiple purposes. He stated, “We should go down that track in our own self-best interest. But at the same time, it also serves others’ interest as well.” He underscored the urgency of these measures, arguing that if European investors face “red tape” at home while receiving a “red carpet” treatment in the U.S., many will ultimately choose to invest in America.

The EU has been actively working to eliminate extensive environmental regulations to enhance the competitiveness of its industries against rivals from the U.S. and China. Currently, there are nine simplification packages in development that span several sectors, including defense, environment, and digital services. These changes are aimed at addressing the growing concerns over the EU’s regulatory burden.

Pressure from the U.S. has been a significant factor in this drive for deregulation. President Donald Trump has criticized EU regulations, claiming they unfairly discriminate against American companies. In response, France and Germany are advocating for similar deregulation measures, while the European Commission is formulating plans to address Trump’s concerns, framing the initiative as part of a self-driven policy reform.

As the EU navigates its relationship with the United States, it is also contending with external pressures, notably from China. The recent decision by China to restrict exports of rare earth materials has further complicated the EU’s position, prompting calls for coordinated responses from the G7 group of industrialized nations.

Rasmussen dismissed the idea of introducing a “sunset clause” to reevaluate the EU’s trade deal with the U.S. He referenced the agreement established in July 2020, which required the EU to eliminate tariffs on American cars and industrial goods while the U.S. imposed a baseline tariff of 15 percent on all EU products. “Defining a sunset clause will not change the reality,” he stated, stressing the need to operate within the current political landscape.

This sentiment was echoed by Thomas Byrne, Ireland’s Minister for European Affairs, who warned against altering the trade agreement. He expressed concerns that revisiting the deal could undermine the interests of European citizens. The European Parliament has also raised questions about the fairness of the trade deal, with some members advocating for a review of the terms conceded to Trump’s administration.

Rasmussen acknowledged that renegotiating the deal could be a possibility in the future, but only when the economic repercussions of Trump’s protectionist policies begin to surface in American society. “In a midterm perspective, you will see implications of this strategy within American society. And then we must stand ready to renegotiate things,” he remarked.

As the EU prepares for its upcoming meeting, the focus will remain on fostering an environment that enhances competitiveness while navigating the complexities of international relations. The stakes are high, as the decisions made now will shape the future of European industries in an increasingly competitive global market.