CEOs want to tear up Europe’s regulatory rulebook, Trump style

Europe’s chief executives appeared to watch with envy as President Donald Trump rolled back a series of regulations on Monday, with a growing chorus of voices calling for similar measures on the continent.

Trump wasted no time on his first day in office and announced a series of executive orders designed to shore up key industries, including lowering electric vehicle production targets and accelerating oil and gas production.

The returning president has long argued that regulation is stifling American innovation and competitiveness, and he has campaigned for a second term on promises to roll back bureaucracy. And, faced with a more assertive United States and growing global rivalry, European business leaders echo that view.

Morten Wierod, CEO of the Swiss robotics company TISSUEwarned that excessive regulation and the associated high costs were pushing frontier companies to move to other markets, ultimately putting the “deindustrialization of Europe” at risk.

“There is a need to clearly restore regulation and let companies move forward,” Wierod told CNBC’s “Squawk Box Europe” at the World Economic Forum in Davos, Switzerland.

Wierod added that European Union regulations, while often well-intentioned, had become too bureaucratic and needed 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 it all together, it becomes too much. It becomes too complex,” he said.

dutch bank INGEU Director-General Steven van Rijswijk agreed that the bloc needs to simplify and harmonize regulation to boost investment and labor productivity, a growing problem for the continent.

“There are a lot of investments that need to be made in infrastructure, a lot of investments that need to be made in Europe’s strategic autonomy when it comes to technological infrastructure, those are the things that need encouragement,” he said.

However, Borje Ekholm, CEO of the Swedish telecommunications company ericksonHe said there was no merit to Europe’s “regulatory-first approach”, arguing it was slowing technological progress.

“I don’t think you can be a pioneer in regulation, I don’t think that creates value,” he said. “Where you need to be at the forefront is in innovation, you need a framework that supports innovation. That’s where the United States has really been successful; Europe needs it.”

European authorities seem aware of the need to innovate and deregulate in the face of growing competition and economic rivalry from the United States and China, but so far they have been slow to act.

Insurance in Zurich CEO Mario Greco said Europe needs to “wake up” if it wants to compete with other global markets, particularly now with a new US administration in power.

“Europe is always behind. It is always busy with itself,” he said.

“In a world that moves very quickly, with a lot of innovation, it is once again a wake-up call for Europe,” he added.

Swiss pharmaceutical company NovartisCEO Vas Narasimhan agreed that it now marks a “big moment” for Europe, arguing that the bloc faces a fork in the road with two quite different outcomes.

“Europe has to decide now – in a world where the United States is deregulating so much and trying to increase competitiveness – whether Europe is going to continue to sit on its hands, continue to increase regulation in the Commission, increase regulation in the various individual countries. Or are we finally going to achieve a more pro-competitive and pro-innovation environment in Europe?” he stated.

“We’ll have to see. History suggests that while there is a lot of talk, the Commission doesn’t take much action. And right now, this is the time.”

One chief executive who expressed more optimism about the UK and Europe’s efforts to boost sluggish economic growth was Barclays chief executive CS Venkatakrishnan.

“Obviously, there have been a lot of (U.S.) controls and regulations put in place in recent years, and we think that will be relaxed. That’s generally good for business sentiment and for business opportunities,” he said.

“And we think those winds are blowing towards Europe and the United Kingdom, where you can see governments understanding what is happening in the United States and trying to see what aspects of their own regulation they should relax.”

“One can hope,” he added.