By Adam Bartha, Director of EPICENTER, the network of leading European free-market think tanks.
On 1st July, Ireland took over the rotating presidency of the Council of the EU for six months. Its stated priorities put competitiveness first, just like much of the Brussels debate over the last two years. This is the right instinct, but progress has been painfully slow and Ireland has now to opportunity to change that.
Ireland does not need to theorise about regulatory reforms. It has successfully delivered it on a national level, not that long ago.
A generation ago, Ireland was one of Western Europe’s poorest economies. It turned that around with a formula that was not complicated. A regulatory framework that is simple and conducive to economic growth. A low, stable corporate tax rate to attract foreign direct investment. Public spending and debt brought firmly under control. Multinationals arrived, productivity climbed, and Irish living standards overtook most of the continent within two decades.
The 2008 banking and property crash was brutal, and the bailout that followed was painful. But the recovery is the part Europe should study. Instead of massive tax hikes and ever-growing regulations, Ireland kept the 12.5% corporate tax rate, repaired the public finances, and grew its way back. Government debt is set to fall to around 58% of modified national income in 2026, less than half the ratio of a decade ago. The state is running a budget surplus. Corporation tax receipts keep climbing on one of the lowest headline rates in the EU. Underlying domestic demand is growing close to 3%, while much of Western Europe drifts towards stagnation.
That is the example Ireland should carry into the Council chamber. Three files on its desk will decide whether the next six months produce reform or another round of communiqués.
Accelerate the regulatory simplification agenda
Start with simplification. EPICENTER’s analysis of the digital omnibus found that it reorganises rather than deregulates: cleaner reporting channels, but the same substantive burden left in place. That is the trap Ireland should avoid. The presidency controls the Council agenda, and it should use that to push for proportionality and necessity tests on digital files rather than another procedural tidy-up. On the Digital Markets Act, experts has warned that a rigid, uniform gatekeeper regime entrenches incumbents and chills investment, so Ireland should back targeted revision, not expansion. And the Industrial Accelerator Act should be drop its dirigiste agenda and not let politicians pick the winners and losers of the market.
Finish the capital markets union
Then capital. European households save heavily while European firms starve for funding, and much of that saving leaves for the United States. The savings and investments union is the closest the EU has come to a single market for capital, and Ireland’s finance minister has called the Market integration and supervision package his primary focus. He should land a Council position on it before December, not hand it to the next presidency. Ireland should also close negotiations on EU Inc, the proposed 28th company-law regime, so a founder can incorporate once and operate across all 27 member states. A single rulebook for capital and company formation would do more for competitiveness than any subsidy line.
Budget: a leaner MFF
Finally, and most importantly, the next EU budget. Leaders are due to take decisions on the 2028 to 2034 Multiannual Financial Framework during Ireland’s term. The Commission’s opening proposal points to a bigger budget financed by new EU-level taxes, including an additional tax on large corporates, levies on e-waste, and tobacco-based own resources. That is the wrong instinct. EPICENTER’s Alternative EU Budget shows the bloc can fund every core single market function for around 1% of EU national income, roughly €1.54 trillion, without inventing a single new tax. Ireland should hold that line: cap the budget, cut the wasteful agricultural and cohesion lines that survive on lobbying rather than merit, and reject new taxes outright, unless they’re offset by the reduction taxes on a national level.
It is human nature to push difficult decisions down the road and on fiscal matters, this often leads decision makers to decide to borrow and increase public debt rather than cut costs. Whilst CEPOS outlines the dangers of high levels of borrowing in Fiscal Bomb Under the European Economy, Ireland knows the lesson first hand. After the financial crisis, the country repaired its own finances by spending less and growing faster. It should ask the same discipline of the EU and ensure that the pandemic era joint borrow was a one off and not a new structural part of the EU.
None of this is the comfortable path. The temptation for any presidency is to broker tidy compromises and avoid a fight. Ireland should resist it. Six months is enough to set a Council position on capital, harden the simplification agenda, and hold the budget to sound principles. Ireland has already proved that a leaner, simpler, more investment-friendly model delivers growth. The question for the next six months is whether Dublin can persuade the rest of Europe to follow the example it set itself.
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