Special Edition | Shaping Europe’s future with confidence: EY Vision toward 2029

We hope you soaked up the sun over the summer. Now let’s shine some light on the future of Europe! ?? ??

At 安永 , we’re not just envisioning the future; we’re shaping it with confidence. With over 70,000 people across 220 offices in the European Union (EU) and a commitment to purpose-driven and sustainable growth, we’re proud to announce our EY Vision for Europe for the next five years! ??

This isn’t just any old manifesto — it’s a roadmap to a more resilient, competitive and sustainable EU. We've outlined 5 priority areas and developed 23 policy recommendations that we believe will pave the way for a stronger Europe, one that requires the collective efforts of government, business, and civil society.

1.??? Promoting the EU’s global role by boosting international trade and investment

2.??? Unlocking the EU’s competitiveness to deliver sustainable growth

3.??? Driving the EU’s digital transition by innovating with integrity

4.??? Aligning the EU’s prosperity with shared sustainability goals

5.??? Championing the EU’s commitment to skills and talent

All our recommendations share a common objective: the need for greater cooperation, harmonization, and streamlining of EU rules. It’s time for Europe to rise to the challenge as Mario Draghi aptly stated at the press conference on his report on the future of EU competitiveness, “do this or it’s a slow agony.” ???

? Before you dive in, make sure to sign up to the EY Public Policy Pulse and read our previous editions, where we look at critical European policy themes that are shaping the landscape for EY and its clients, from sustainability and digital transformation to corporate governance, reporting and geopolitics.

With the start of a new legislative cycle, our EMEIA Public Policy team is delighted to work with our stakeholders on these themes and more. Join us in collaborating for positive change. Let’s connect! ?? ?? ??

??? "The attractiveness of Europe as a place to live and work is not just a shared interest, it is also a shared responsibility. For us at EY, the collaboration between public and private sector in pursuit of purposeful growth is just one way in which we seek to fulfil our purpose of Building a Better Working World. We look forward to continuing the conversation." Julie Teigland , EY EMEIA Area Managing Partner

Promoting the EU’s global role by boosting international trade and investment

Can EU companies trade and invest tomorrow on today’s policies?

According to EY Europe Attractiveness Survey 2024, 48% of foreign investors are looking to create more regionally based supply chains — this, however, does not mean less international trade, rather different trade flows.

Businesses seeking to comply with the EU's new supply chain-related legislation and policy measures must adopt the required compliance processes, ensuring their supply chains are more diversified, resilient, and sustainable. This includes decarbonizing production, protecting labor rights, enhancing transparency, and making informed sourcing decisions.

?? Our recommendations

1. Champion sustainable international trade and investment. The EU must reinforce its position as a leader in free and fair trade, finalizing key Free Trade Agreements (FTAs) and pursuing non-traditional agreements like digital trade partnerships.
2. Support the rules-based trading system. The EU should continue to advocate for World Trade Organization reforms, including re-establishing an effective dispute settlement system, ensuring it can manage global challenges.
3. Build trusted partnerships amid growing geopolitical competition. The EU’s Global Gateway should focus on green transition and digital infrastructure in developing countries, while helping traders meet the EU’s standards to avoid "Green Colonialism" accusations.
4. Support a robust trade and investment regime. The EU should align existing supply chain and enforcement measures, working with the private sector to reduce overlap. This includes modernizing customs processes and ensuring uniform implementation across Member States.

?? What are EY teams doing?

EY teams are helping businesses seize trade opportunities in new markets and overcome trade barriers and geopolitical challenges, while helping ensure compliance with new trade and supply chain legislations. We are also active in the conversation between foreign investors and EU institutions, as well as national and regional governments.

EY teams are dedicated to helping businesses assess how to enter new markets, considering the full range of factors to identify the best opportunities. This involves building effective trade functions within businesses, including their strategies, size, reporting lines and recruitment plans, and addressing skills gaps, especially in digital and sustainability requirements.?

If you would like to know more, please get in touch with George Riddell .

Unlocking the EU’s competitiveness to deliver sustainable growth

Is Europe rising to the competitive challenge of today and tomorrow?

Despite a decline in European FDI in 2023, an increasing number of global executives told us that they plan to expand or establish operations in Europe in the next year.

?? Our recommendations

1. Show that Europe is open for business. Despite recent challenges like COVID-19, geopolitical tensions, and economic pressures, Europe is resilient and ready to do business, with its best days ahead.
2. Deliver on the Capital Markets Union. Significant progress has been made on the CMU, but momentum must continue, especially by leveraging digital technologies to enhance market liquidity and capital access.
3. Implement targeted, consistent, and simple tax policies. Simplify and harmonize tax legislation across the EU to reduce administrative burdens and prevent economic distortions, boosting the EU's competitiveness.
4. Strengthen European unity through the single market. The single market is key to EU success. The EU should protect and deepen it, particularly by liberalizing trade in services.
5. Redouble efforts on combating financial crime. Trust in markets is vital. The EU should establish formal channels for information sharing between regulators, financial institutions, and service providers to strengthen Anti-Money Laundering (AML) efforts and effectively combat financial crime.
6. Close economic collaboration with EU neighbors. The EU should strengthen economic and political ties with like-minded nations to ensure stability and shared prosperity in the face of global uncertainty.

?? What are EY teams doing?

EY teams assist large companies, small and medium-sized enterprises (SMEs), and FinTechs in gaining access to capital, growing and competing.

As professional service providers, we have dual responsibilities in AML/CTF. We adhere to the same regulations as EY clients and also guide them through compliance complexities. This dual role gives us a unique perspective on implementing and improving AML/CTF measures.

As well as advising clients on their anti-corruption measures, the EY organization is a signatory to and active member of the World Economic Forum ’s Partnering Against Corruption Initiative (PACI). The EY organization is also aligned to the OECD - OCDE ’s Anti-Corruption and Integrity Taskforce.

If you would like to know more, please get in touch with Ambrose Murray .

Driving the EU’s digital transition by innovating with integrity

Can ethical technology elevate competitiveness, quality and integrity?

In a recent series of research articles, EY teams have estimated that AI can lift Western Europe’s GDP by up to 3.7% by 2033 by boosting investment and productivity growth.

EY teams believe that a balanced approach to governance promotes innovation while mitigating risks. To achieve this, we encourage policymakers to collaborate with industry, leveraging their expertise to assess how digital legislation can better drive European growth.

?? Our recommendations

1. Keep people safe. EU policymakers should protect citizens' fundamental rights in the digital realm by clearly defining obligations and ensuring transparent enforcement to prevent abusive practices in digital and AI systems.
2. Foster innovation and growth. The EU should drive digital innovation by creating a favorable environment for startups, attracting talent and investment, and prioritizing non-regulatory measures like codes of conduct to maintain competitiveness.
3. Align regulation and standards internationally. The EU should lead in international cooperation to establish ethics-based frameworks and common standards, helping businesses navigate global markets and regulatory challenges.
4. Lead the way in developing global standards. The EU must make its standards development process more agile and inclusive of global experts, ensuring that these standards are realistically attainable and internationally attractive.
5. Harmonize data regulation. The EU should enhance data sharing between sectors, review the effectiveness of new data laws, and promote standardization in data access and interoperability.
6. Consolidate cybersecurity frameworks. The EU should harmonize cybersecurity standards, expand the scope of NIS2 to cover emerging sectors increasingly at risk of cyber threats and enhance collaboration and education to build a resilient digital ecosystem and strengthen global cybersecurity leadership.

?? What are EY teams doing?

For more than a decade, the EY organization has embedded AI into many global technology solutions. In 2021, we supercharged this effort with a US$10 billion, three-year investment plan. We have also embedded AI into the EY Canvas audit platform to support risk assessment.

In 2023, we brought together all our AI innovation and development efforts under one platform, EY.ai. This unified platform helps enable businesses to efficiently access AI benefits at EY, while increasing transparency, trust, and confidence in AI to serve society and promote a more inclusive, equitable future.

As a dedicated stakeholder, we are focused on realizing benefits and reducing risks while moving into this next technological revolution. For example, we are already helping businesses make the necessary preparations for implementing the compliance requirements of the EU AI Act. Drawing from our extensive history as a global leader in high-quality audits, we’ve helped build confidence in financial markets and are equally committed to doing the same for emerging technologies such as AI.

If you would like to know more, please get in touch with Dean Protheroe .

Aligning the EU’s prosperity with shared sustainability goals

Can public-private collaboration steer EU’s prosperity toward sustainability?

According to the EY Europe Attractiveness Survey 2024, 67% of respondents consider Europe better than other regions in supporting their businesses achieve their sustainability plans.

Creating global sustainability reporting frameworks is imperative for effectively addressing climate change as it requires global coordination and effort, and cannot be tackled through isolated efforts from a few countries or regions.

?? Our recommendations

1. Streamline ESG reporting. Businesses need better tools and guidance to report ESG data. Collaboration between EFRAG , International Sustainability Standards Board (ISSB) , and FSB Task Force on Climate-related Financial Disclosures (TCFD) is key to creating global standards and avoiding multi-reporting, accelerating sustainable innovation.
2. Catalyze net-zero efforts. Achieving a net-zero economy by 2050 requires immediate collective action, focusing on sustainable finance, energy transition, and reducing environmental impacts, with public-private collaboration at the forefront.
3. Boost clarity in EU taxonomy reporting. Companies should improve their data processes to align with EU taxonomy, and clearer guidance from the EU will reduce burdens and facilitate investment in green initiatives.
4. Incentivize green innovation. Governments should increase funding and incentives for green tech, while simplifying access to funding and speeding up the transition to a green economy to meet urgent climate goals.

?? What are EY teams doing?

Within our EY Climate Change and Sustainability Services (CCaSS) services, the New Economy Unit (NEU) focuses on research and insights around the long-term, systemic shifts toward a new, regenerative economy.

The EY Tax team has made available a preview of EY Green Tax Tracker that covers green taxes, environmental fees, waste charges, incentives, and subsidies that major jurisdictions have put in place and are planning to introduce. There are currently over 3,000 green taxes and over 2,000 sustainability related incentives in place across all policy areas, from climate policy to circular economy plans, as well as pollution reduction and biodiversity and water protection plans.

The EY organization also publishes an annual Worldwide R&D Incentives Reference Guide to provide businesses with an overview of economic incentives for R&D, innovation, and sustainability.

If you would like to know more, please get in touch with Elsa Venturini .

Championing the EU’s commitment to skills and talent

Are we investing in skills that propel us forward, or clinging to those that anchor us in the past?

More than two out of three employees in Europe fear job losses due to AI, with concerns lowest in Switzerland at 57% and highest in Portugal at 80%.

Nevertheless, in the EY Europe Attractiveness Survey 2024, 62% of surveyed business executives rated Europe as outperforming other regions in terms of the availability of a highly skilled technology workforce (e.g., scientists, engineers, data analysts) when choosing a country to invest in.

?? Our recommendations

1. Equip future generations with a multifaceted education. A dynamic education in sustainability and disruptive tech, combined with essential human skills like adaptability, requires joint efforts from corporations, governments, and educators to prepare youth for the future.
2. Prioritize attracting, retaining and upskilling AI and green talent. Organizations and policymakers must prioritize bridging the skills gap in AI and green industries, leveraging EU investments to retain Europe’s leadership in innovation and research.
3. Develop European Skills Badges. A standardized framework for skills badges would validate nontraditional learning, making career transitions smoother and fostering a more inclusive workforce with trusted recognition of diverse skills.

?? What are EY teams doing?

At EY, we are committed to helping create long-term value for people through a robust investment in lifelong learning and development of future-focused skills. To prepare our 70,000 professionals across the EU for workplace disruption and democratize access to new, in-demand and transferrable skills, we founded the EY Badges program (portable, digital credentials in future-focused skills) in 2017. EY people from the 27 EU member states have earned more than 17,000 EY badges since their launch.

In 2023, we celebrated our sixth and largest ever EY Tech MBA cohort with 24 graduates and the first-ever cohort of EY Masters in Sustainability, totaling 30 graduates in the EU across our EY Degrees (free for EY people regardless of rank or location), including the EY Masters in Business Analytics, offered in collaboration with Hult International Business School .

Numerous projects within EY Ripples, our global corporate responsibility program, are driven by our aspiration to inspire the next generation of women in STEM. This is precisely why we launched the EY STEM App – a free-of-charge mobile platform designed to immerse girls in engaging and interactive learning experience focusing on STEM disciplines intertwined with a holistic exploration of SDGs. Through this app, we have positively impacted nearly 330,000 lives worldwide.

The global network of EY?Neuro-Diverse Centre of Excellence (NCoE) also represents a further step in nurturing Diversity, Equity & Inclusiveness (DE&I) talent in the workplace by supporting individuals with neuro-cognitive differences – such as autism, dyslexia, and ADHD – apply their strengths and meet business needs in emerging technologies, including AI, data analytics, and cyber.

If you would like to know more, please get in touch with Ivan Mannino or Mandukhai (Monti) Otgonchimeg .

We would love to hear your thoughts on any of the topics above, so please feel free to share this newsletter and leave your comments below ??

This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, legal or other professional advice. Please refer to your advisors for specific advice.?

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