The European Commission has launched a broad initiative to boost EU competitiveness and productivity across multiple fronts amid growing concern about what the new Trump administration will mean for Europe’s economy.

The so-called Competitiveness Compass is designed to boost the EU’s productivity in the spheres of innovation, decarbonisation and security.

However, environmental groups have criticised the initiative’s tendency to prioritise de-regulation as a way to achieving higher productivity.

The initiative sets out a series of “flagship” measures in keeping with the findings of the recent report by the former ECB president Mario Draghi, which highlights major shortfalls in EU productivity and competitiveness.

The initiative is designed to steer the Commission’s work programme to ensure that Europe becomes “the place where future technologies, services, and clean products are invented, manufactured, and put on the market,” according to a statement.

The Draghi Report depicted a European Union which was in economic decline relative to the US and China, in terms of growth, the availability of deep and liquid capital markets, and the ability to create and scale up innovative companies.

“Europe has everything it needs to succeed in the race to the top. But, at the same time, we must fix our weaknesses to regain competitiveness,” European Commission President Ursula von der Leyen said in a statement.

The Commission said the Competitiveness Compass aims to create a habitat for “young innovative start-ups, promote industrial leadership in high growth sectors based on deep technologies and promote the diffusion of technologies across established companies and SMEs.”

The Commission will propose AI Gigafactories and “Apply AI” initiatives to drive development and industrial adoption of AI in key sectors.

There will be action plans for advanced materials, quantum, biotech, robotics and space technologies, as well as a new EU Start-up and Scale-up Strategy, designed to remove obstacles from new companies emerging and scaling up.

According to a statement, a new Affordable Energy Action Plan will help bring down energy prices, while an Industrial Decarbonisation Accelerator Act will speed up the allocation of permits to sectors in transition when it comes to meeting net zero targets.

The promise of cutting regulations and of greater flexibility for energy intensive industries such as steel, metal and chemicals, has already drawn the ire of environmental groups.

Cristina Pricop, fossil fuels campaigner at Friends of the Earth Europe said: “With the Competitiveness Compass, the Commission clings on to outdated economic models reliant on fossil fuels, and gambles on unproven technologies like hydrogen and carbon capture”.

“Progress on climate action is alarmingly slow, and replacing Russian gas without a plan to phase out all fossil gas is not the bold action Europe or the climate need. True leadership means phasing out fossil fuels entirely and charting a course out of this dangerous dependency,” she said.

Ester Asin, Director of WWF’s European Policy Office, said Competitiveness Compass was “fundamentally wrong” since it framed the EU’s green transition as being at odds with economic growth.

“True competitiveness lies in rapid decarbonisation, restoring nature, and scaling up green technologies, not in blind deregulation that consolidates the market position of polluting industries,” she said in a statement.

However, the initiative has been welcomed by the main European business lobby.

BusinessEurope Director General Markus J Beyrer said: “Bringing a ship to its destination requires clear directions, and today’s Competitiveness Compass provides these coordinates”.

“The Compass must urgently be followed by concrete and impactful actions which deliver meaningful changes for companies in their daily operations,” he said.

Beyrer said the EU had to prioritise reducing regulatory burdens in order to deliver on the promise to make it easier to do business in Europe.

“The EU must also introduce strong measures to mitigate the energy cost competitiveness gap, accelerate the market deployment of innovation and ensure faster permitting procedures, enabling all industries to transform at speed,” he added.

Danny McCoy, the CEO of Ibec, highlighted the Draghi Report in the group’s economic outlook last week, suggesting that “high energy costs, project delays, regulatory burdens, and an incomplete Single Market” were challenges for Europe and Ireland.

“It is critical key commitments in the new Programme for Government for an Action Plan for Competitiveness and Productivity, measures to enhance the speed and effectiveness of infrastructure delivery and reducing redundant or excessive regulatory burdens on business are advanced with a clear sense of purpose and a renewed energy by the new government,” he stated.