The Compass sets a path for Europe to become the place ‘where future technologies, services, and clean products are invented, manufactured, and put on the market,’ according to a statement, and comes ahead of the release of the Clean Industrial Deal, another key competitive plank, next month. It aims to convert the recommendations of the Draghi report into a’ roadmap’.

“Over the last two decades, Europe has not kept pace with other major economies due to a persistent gap in productivity growth,” it states.

“The EU has what is needed to reverse this trend with its talented and educated workforce, capital, savings, Single Market, unique social infrastructure, provided it acts urgently to tackle longstanding barriers and structural weaknesses that hold it back.”

The wide-ranging recommendations include closing the innovation gap, developing AI gigafactories, and setting up an EU start-up and scale-up strategy.

“The Compass identifies high and volatile energy prices as a key challenge and sets out areas for intervention to facilitate access to clean, affordable energy,” it states.

“The upcoming Clean Industrial Deal will set out a competitiveness-driven approach to decarbonisation, aimed at securing the EU as an attractive location for manufacturing, including for energy intensive industries, and promoting clean tech and new circular business models.”

It refers to a new range of Clean Trade and Investment Partnerships to help secure supply of raw materials, clean energy, sustainable transport fuels, and clean tech globally.

An Affordable Energy Action Plan will aim to bring down energy prices and costs, while an Industrial Decarbonisation Accelerator Act will extend accelerated permitting to sectors in transition.

President of the European Commission, Ursula von der Leyen, said: “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. We have the political will. What matters is speed and unity.”

The timing couldn’t be more pertinent with the US poised to introduce tariffs and send competitive shockwaves throughout the global economy. President Trump told Davos delegates last week that Europe has to speed up their process. “I’m trying to be constructive, I love Europe … but the process is cumbersome and they treat the US very unfairly with VAT taxes.”