US President Donald Trump delivers his inaugural address after being sworn in as the 47th President of the United States in the Rotunda of the US Capitol on January 20, 2025 in Washington, DC.
Chip Somodevilla | AFP | Getty Images
CEOs in Europe appeared to be watching with envy as President Donald Trump rolled back a slew of regulations on Monday, with a growing chorus of voices calling for similar moves on the continent.
Trump wasted no time on his first day in office, announcing a series of steps Executive orders Designed to support key industries, including reducing electric vehicle production targets and accelerating oil and gas production.
The returning president has long argued that regulation stifles U.S. innovation and competitiveness, and campaigned for a second term with pledges to eliminate red tape. In the face of a more aggressive United States and increasing global competition, European business leaders echo this view.
Morten Wierud, CEO of the Swiss robotics company ABBHe warned that excessive regulation and the high costs associated with it are pushing frontier companies to move to other markets, which ultimately threatens the decline of manufacturing in Europe.
“There has to be a clear reset of regulation and companies being allowed to get on with it,” Wierud told CNBC's “Squawk Box Europe” at the World Economic Forum in Davos, Switzerland.
Wierud added that EU regulations, while often well-intentioned, have become too bureaucratic and need to be simplified to give companies the flexibility to innovate and grow.
“Every regulation is put in place with good intentions. But when you take everything and put it together, it becomes too much. It becomes too complicated,” he said.
Dutch Bank a jobEuropean Union Chief Executive Steffen van Rijswijk agreed that the bloc needed to simplify and harmonize regulation to boost investment and labor productivity, which is a growing concern for the continent.
“There are a lot of investments to be made in infrastructure, a lot of investments to be made in Europe's strategic autonomy when it comes to technological infrastructure, these are the things that need to be stimulated,” he said.
Addressing the “regulatory first” approach in Europe
The European Union has one of the most stringent regulatory business environments in the world, and often prides itself on being the first mover in setting guidelines for managing industries and protecting consumers.
However, said Borje Ekholm, CEO of Swedish Telecom EricssonHe said there was no merit in Europe's “first regulatory approach”, arguing that it limited technological progress.
“I don’t think you can be at the forefront of regulation, and I don’t think that creates value,” he said. “Where you need to be at the forefront is innovation, you need a framework that supports innovation. This is where the United States has had real success – and Europe needs that.”
European policymakers appear to recognize the need for innovation and deregulation in the face of burgeoning economic competition from the United States and China, but their action has been slow so far.
Zurich Insurance CEO Mario Greco said Europe needs to “wake up” if it wants to compete with other global markets, especially now with a new US administration in power.
“Europe is always lagging behind. It is always busy with itself,” he said.
“In a world that is moving very quickly forward, with so many innovations, this is a wake-up call for Europe again,” he added.
Swiss pharmaceutical company NovartisChief Executive Vas Narasimhan agreed that it now represents a “big moment” for Europe, arguing that the bloc faces a crossroads with two very different outcomes.
“Europe has to decide now – in a world where the United States is dramatically deregulating and trying to increase competitiveness – is Europe going to continue to sit idly by, continue to increase regulation in the Commission, and increase regulation in various individual countries. Or will we finally get A more conducive environment for competition and innovation in Europe.
“We will have to see. History suggests that although there has been a lot of talk, there has not been a lot of action from the Commission. Now is the moment.”
One CEO who has expressed more optimism that the UK and wider Europe could look to emulate the US in order to boost sluggish economic growth is Barclays. C.S. Venkatakrishnan.
“Obviously there's a lot of (U.S.) controls and regulations that have been put in place in the last few years, and we think that will be eased. That's generally good for business sentiment and good for business opportunities.”
“And we think those winds are blowing towards Europe and the UK, where you can see governments understanding what's happening in the US and trying to figure out which aspects of their own regulation they should relax.”
He added: “One can be optimistic.”
