European Union leaders will convene for an informal retreat Thursday, February 12th, at Alden Biesen castle, near Brussels, to address growing concerns over the continent’s economic competitiveness. The meeting, called by European Council President António Costa, will center on strategies to bolster the single market and counter economic pressure from the United States and China.
Costa, in his invitation to the 27 EU heads of state and government, urged action to “reduce effectively national barriers and make the regulatory framework…more favorable to investment, innovation and the growth of businesses.” He described strengthening the single market as an “urgent strategic imperative” and called for it to become “a powerful engine of simplification for both citizens and businesses.”
A key proposal on the table is the implementation of a “28th regime,” an initiative designed to streamline operations for European companies and startups and close the technological competitiveness gap with the US and China. The European Commission is expected to present details of the plan, which aims to harmonize rules and reduce administrative burdens.
The concept of a 28th regime was publicly discussed at the World Economic Forum in Davos, signaling its priority for Commission President Ursula von der Leyen. The initiative seeks to establish a unified set of rules applicable across the EU, leveraging digital solutions to ease the process of company creation, growth, and operation within the single market. A core goal is to simplify regulations and reduce the costs associated with business failure.
According to a consultation launched by the European Commission on July 8, 2025, the 28th regime would focus on defining essential elements of companies operating under the new framework, implementing simplified and rapid procedures for establishment and dissolution – including digital tools and the “once-only” principle for information sharing – and fostering more flexible governance structures through the employ of the European Digital Identity Wallet. The regime also aims to attract investment through digital tools facilitating capital increases and share transfers.
However, the proposal is not without its critics. The European Trade Union Confederation (ETUC) has voiced concerns that a 28th regime could pose risks to existing workers’ rights, particularly if accompanied by broader harmonization of policies for companies operating under the new framework. The ETUC adopted a position paper on March 5, 2025, outlining these concerns and advocating for the defense of workers and labor law.
Discussions surrounding the 28th regime will continue at the formal European Council summit scheduled for March 19th and 20th, where leaders will further debate measures to enhance European competitiveness and strengthen the single market. The legal basis for the 28th regime is expected to be Article 352 of the Treaty on the Functioning of the European Union, which allows the EU to take action to achieve objectives set out in the treaties, even if those objectives are not explicitly covered by existing powers.
