Ahead of German-Italian government consultations scheduled for Friday in Rome, Germany and Italy have announced a joint initiative calling for sweeping reforms to the European Union’s economic and trade policies. According to an English-language position paper obtained by AFP, both governments agree on a determined push for greater competitiveness, a drastic reduction in bureaucratic barriers, and a more ambitious EU trade agenda. Among their proposals: applications submitted by citizens should automatically be considered approved if an authority fails to respond within a set deadline.
A central demand is a radical acceleration of planning and approval procedures across all economic sectors. “We need an ambitious reduction of regulatory burdens for our companies,” the paper states. Berlin and Rome want EU leaders at February’s retreat and the March summit to agree on “a clear agenda and concrete commitments to strengthen European competitiveness.”
They argue that businesses and citizens in EU countries should receive binding decisions within short deadlines, and that applications must be deemed approved if authorities fail to act, a standard they say should apply across Europe. Both countries also call for a fundamental shift in EU lawmaking. They urge the European Commission to adopt a “strict principle of discontinuity,” meaning legislative proposals begun in one EU term should automatically lapse at the end of that mandate. This rule already applies in the German Bundestag but not at EU level.
Legislative proposals that no longer reflect current political priorities should be removed from the process. These so-called “zombie initiatives” must be withdrawn, the paper says. Germany and Italy also argue for an emergency brake in EU lawmaking when new rules would impose additional burdens on businesses or public administrations.
The two governments highlight what they see as significant reform needs within the EU’s single market. Although it is the world’s second-largest market with around 450 million consumers, internal trade barriers are said to be slowing it down. Citing International Monetary Fund figures, the paper states that these barriers act like a 44 percent tariff in goods trade and more than 110 percent in services. An “ambitious reduction of regulatory burdens” and an adaptation of the single market to the “current geoeconomic reality” are deemed necessary.
On competition policy, Berlin and Rome call for a shift in perspective. Mergers between European companies should be assessed more on a global scale to enable the creation of competitive “European champions,” while ensuring consumer protection is not undermined. They urge the European Commission to present revised merger-control guidelines “without delay.”
In unusually direct language, the paper opens with a bleak assessment of Europe’s economic position. It states that Europe has been falling behind for years, that the growth gap with the United States and China has widened since the early 2000s, and that emerging competitors are gaining global influence. “This threatens the European standard of living and European sovereignty,” the paper warns, adding that continuing as before is “not an option.” Europe, it says, must act now.
Another central theme is trade policy. In a world increasingly shaped by protectionism and economic pressure, Europe must maintain open, fair, and rules-based trade relations.
Germany and Italy notably describe the EU-Mercosur agreement as an “important step”, despite the Italian government having blocked approval in the European Council until late December. They also criticize the more than 25-year duration of the Mercosur negotiations as “far too long” and call for “more ambition, more focus, and more speed” in concluding free-trade agreements with India, Australia, the United Arab Emirates, and the ASEAN states.
The joint initiative comes shortly before Friday’s government consultations. Chancellor Merz will travel to Rome with several ministers. The agenda includes bilateral talks with Italian Prime Minister Giorgia Meloni and a joint cabinet meeting. According to the German government, those joining Merz include Finance Minister Lars Klingbeil, Foreign Minister Johann Wadephul, Defence Minister Boris Pistorius, and Interior Minister Alexander Dobrindt.
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