November 2022 Editorial – EPN Consulting Newsletter


A couple of days ago I was reading the latest issue of the Economist magazine and my attention was caught by the following article: “Europe faces an enduring crisis of energy and geopolitics – This will weaken it and threaten its global position” where the following is quite worrying:

…Europe, with its quaint insistence on upholding World Trade Organisation rules on free trade, looks like a sucker. Already, companies are reacting to the subsidies. Northvolt, a prized Swedish battery start-up, has said that it wants to expand production in America. Iberdrola, a Spanish energy company, is investing twice as much in America as in the European Union. Many bosses warn that the combination of expensive energy and American subsidies leaves Europe at risk of mass deindustrialisation. Basf, a German chemicals giant, recently unveiled plans to shrink its European operations “permanently” “.

The article doesn’t make a proper distinction between the EU and Europe, however those who keep themselves informed already know that Europe is not a business reference anymore in the world and  technological innovations rarely can be attributed to European companies. Apart from the digital music format mp3 (developed in Italy in the 1990s), Spotify and Skype (the latter now owned by Microsoft), not many others are recalled.

In my opinion, a couple of reasons could be responsible for this situation. The first one is red tape: generally in Europe there is too much and it ranges from setting up a company and related costs and taxation to the difficulty of getting funds. In particular, if the company does not produce tangible products with machineries, it finds incredibly hard to get funds, in particular grants. A few EU countries, but not all, offer a simplified limited form with reduced setup costs and taxation and some time spent shopping around is needed. Some other EU countries offer the possibility to set up companies with one or more foreign directors (i.e. director who does not live in that country), but not all. The list of differences among EU countries is long and the decision on where to set up a new business is not an easy journey.

The other red tape is a consequence of the first one: too much fragmentation of the countries scenario. Ideally, setting up – and run – a limited company in the EU should follow the same rules everywhere, but the reality is every single country determines its own rules.

The European Commission launched in 2019 the EU Green Deal and in 2021 the Horizon Europe funding programme that with a budget of EUR 95.5 billion over seven years should help companies and universities improve, innovate, boost industries state of the art & processes to gain visibility, reputation and markets. Hopefully this will happen by 2027, however the EU must accelerate the modernisation process by simplifying procedures and legislation before it is too late.

Stefano Mainero
EPN Consulting and EPN Consulting Research & Innovation Founder and CEO