r/EuropeanFederalists • u/lawrotzr • 7h ago
Opinion: EU Inc as a case study in why the EU cannot deliver, and consequences it has for the federalist movement
Some background: https://tech.eu/2026/10/16/eu-inc-will-europe-blow-its-biggest-chance-to-get-startups-right/
I'm in favour of deeper integration, which is exactly why I think EU Inc deserves more critical attention here. Not because the proposal is unusually important, but because it is unusually simple. If you want to understand why the EU keeps failing on its own competitiveness agenda, this file shows the whole mechanism in miniature.
The case for it is well established. Letta and Draghi both identified fragmented company law as a structural barrier to scaling within the Single Market, and both pointed to a 28th regime as a remedy. The Commission's proposal from March delivered on that: fully digital incorporation within 48 hours, simplified company rules and a framework for employee stock options.
It leaves taxation and labour law with the member states. It costs no money, creates no new agency and harmonises nothing. In EU terms, this is about as easy as it gets.
And yet, according to the founders of the EU Inc campaign, it is being hollowed out. In an open letter to the heads of government, they warn that months of negotiation have stripped out the provisions that gave the proposal its value: free choice of the member state of registration, a common stock option framework, a genuine central European registry, and access for all companies rather than a narrowly defined category.
We have seen this exact film before. The Societas Europaea of 2001 survived negotiations, but with so many national variations that it became a vehicle for large corporates rather than growing companies. The Societas Privata Europaea, proposed in 2008 specifically for SMEs, never made it through the Council and was withdrawn in 2014.
The pattern goes well beyond company law. The Services Directive was substantially watered down before adoption in 2006. Capital markets union has been a stated priority since 2015 and remains largely unfinished. Banking union still lacks a common deposit insurance scheme.
The usual defence is that this is democracy at work. But I'd question how democratic it really is. The European Trade Union Confederation has called for the proposal to be strengthened or abandoned, arguing companies could register in states with weaker labour protection while operating elsewhere.
That concern deserves a serious answer, but the campaign's own position is that employees remain covered by the labour law of the country where they work. So I genuinely wonder how many of the people protesting against EU Inc have looked at what it actually contains, or whether opposition is being mobilised by national actors with narrow interests, as happened with the Bolkestein directive and the "Polish plumber" in 2005.
There is also a structural imbalance in who gets heard. Unions, notarial chambers, banks and national legal professions are organised and present in Brussels. The beneficiaries of EU Inc are entrepreneurs, founders, who have not yet started their companies, employees not yet hired and investors who have not yet invested. They have no lobby, because they don't exist yet. A process that weighs organised interests against people who are not in the room will predictably favour the status quo. That is procedurally legitimate. Whether it is democratic in any meaningful sense is another question.
Here is where I think this sub needs to look in the mirror. If EU Inc fails, I don't think bigger things will ever succeed in the current EU. Not a capital markets union, not a defence union, not fiscal integration. Not with 27 member states, unanimity or consensus culture in the Council, and every national interest holding a de facto veto. And I see no realistic path by which that structure changes, because changing it requires the same unanimity that blocks everything else.
What does work is smaller coalitions. Schengen and the euro both started among a subset of countries. The unitary patent was discussed for decades and only came into force in 2023, through enhanced cooperation that left out the countries blocking it. If integration happens at all, it will happen that way: a core group moving ahead, not the Union as a whole.
However much enthusiasm there is here for the federalist idea, I think we have to accept that it cannot be achieved in the EU's current form, and that the current form is not going to change.
Accepting that also means accepting the consequence. Europe will remain dependent on American and Chinese innovation, because our own does not scale.
Draghi already showed this: between 2008 and 2021, close to 30% of unicorns founded in Europe relocated their headquarters abroad, the vast majority to the US. The European Investment Bank adds that around 10% of EU scaleups relocate, with 85% of those going to the US. And it is getting worse, not better: according to Atomico, the share of founders with their first experience in Europe who incorporated their startup in the US rose from 10% in 2016 to 18% in 2025. That amounts to roughly 800 companies a year founded in the US by European founders instead of here.
So my question to this sub is not how we would have to fix the EU. It's whether we are willing to admit that we cannot, and what a federalist movement should be arguing for once we admit that.