Outside the box: Innovative ideas from CEPS Ideas Lab

In its 2025 work programme, the European Commission effectively scrapped the AI Liability Directive (AILD) – a move that threatens to unravel trust in the EU’s burgeoning AI policy landscape. This abrupt decision strips away potential critical protections for victims of AI-related harm and denies businesses the legal certainty they need to innovate.

While the Commission touts a ‘Bolder, Simpler, Faster Union’, abandoning the AILD risks undercutting Europe’s competitive edge and leaving a gaping hole in its AI legal framework. In doing so, the Commission is undermining its own goal of fostering an ecosystem of trust and promoting AI made in the EU.

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The complexity of EU law dealing with digital services has exploded over the past five to 10 years, both in the sheer number of laws that have come into force, and in how complicated they are. Under these circumstances, the task of ensuring consistency across these laws – not only in the laws’ text but also how they’re enforced among Member States – has absolutely exploded. The Letta report, the Draghi report and the Commission’s new Competitive Compass have all called for making EU regulation simpler, more coherent and more consistent across the Member States.

Multiple reports and surveys show that businesses are not only concerned about the growing regulatory burden but are also increasingly uncertain over how to comply with multiple laws that cannot be guaranteed to be fully mutually . Despite the legislators’ best efforts, experience has shown that some inconsistencies only become evident once the laws have come into force – and that’s why we need to set up a new coordination body to rectify this, an EU Digital Clearinghouse.

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The EU’s ambitions must be supported by adequate resources. This is particularly true for global health, where uncertainty stemming from the new US administration and other geopolitical shifts highlight the urgent need for the EU to step into the leadership role it has long sought.

Neglected diseases (or ‘NDs’) present a strategic opportunity for the EU to make a smart investment that could have a real impact on global health. NDs impact around 1.6 billion people globally, causing devastating health and socioeconomic consequences. Since those affected primarily live in low- and middle-income countries (LMICs) with limited ability to pay, there has been little to no commercial incentive for developing new medicines and vaccines targeting NDs.

Both the spread of NDs as well as their global health security significance are shifting. Climate change is facilitating the (re-)emergence of vector-borne diseases in other regions; linked challenges such as rising antimicrobial resistance (AMR) are increasing the disease burden; and some NDs have epidemic or even pandemic potential. As we’ve seen for Ebola or mpox, NDs tend to be neglected – until they come (close) to us. But at that point, it may already be too late for many to benefit from a new vaccine or medicine.

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We are depleting our planet’s finite resources at a dangerous pace, driven largely by overconsumption in the Global North. This fuels emissions, pollution and biodiversity loss, despite efficiency gains. And regardless of lower net emissions, EU consumption shifts environmental harm abroad, worsening global inequities.

Buildings and transport are central to this crisis. On the one hand, they’re crucial for people’s lives. On the other, the EU construction industry consumes 1.8 billion tonnes of raw materials – a third of the bloc’s total – and generates 330 million tonnes of waste annually. Meanwhile, transport emissions, particularly from road transport, account for nearly a quarter of EU emissions. This relentless resource use pushes us past planetary boundaries, threatening the Earth’s capacity to sustain life.

Of course, those who consume the least often suffer the most from its consequences. In housing, unequal access is stark, with the cost-of-living crisis exacerbating disparities. Similarly, poorer EU regions still often lack access to public transport.

We are facing an interlinked social-ecological challenge: lowering resource consumption and environmental impacts while addressing social inequalities. Efficiency and renewable energy are vital, but they’re not enough. We must embrace sufficiency.

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By Nicole Reynolds

In the age of the poly-crisis, the world is constantly lurching from one disaster to another – from unprecedented flooding in Spain to a once-in-a-lifetime pandemic, from new bouts of political instability to ongoing conflict in the Middle East. Indeed, the poly-crisis has morphed into a ‘permacrisis’ and the impacts of climate change are a clear manifestation of this new reality. One must only witness the widespread destruction caused by the recent wildfires in California to understand the urgency of the climate crisis.

That’s why these novel challenges demand new ideas and policy tools, all conceived through a radical systems change that will future proof our crisis response and, by extension, policy frameworks.

Climate change’s impact on financial markets is one such challenge that the world is ill-prepared for because there are no precedents and thus regulators need to come up with new solutions. The EU has enacted the most ambitious financial legislation in the world to address climate change but it still may not prepare the ECB for what the Bank of International Settlements in 2020 called the ‘green swan’ – where certain climate risks could result in a financial crisis triggered by the transition away from the use of fossil fuels.

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The EU’s General Data Protection Regulation (GDPR) was initially heralded as a ground-breaking legal framework for data privacy. However, in its current form and application, it has become a roadblock to digital progress, stifling innovation, impeding AI development and hampering essential research. A review of the GDPR is now overdue, with the current rules in place since 2018.

If Europe wants to remain competitive in an increasingly data-driven world, some immediate reforms to the GDPR are essential. We need urgent measures to resolve access issues to datasets, implement a risk-based approach to regulation and create a harmonised and simplified legal framework that promotes both privacy and innovation.

In the digital age, data is the currency of progress. Without access to datasets, AI models cannot be trained, medical research cannot advance and businesses cannot operate efficiently. Yet under the GDPR’s stringent and often inconsistent enforcement, accessing, processing and sharing data has become an administrative nightmare. The regulation’s complexity, combined with varied national interpretations, has led to a bureaucratic bottleneck that stymies economic growth and research advancements.

That’s why it’s time for a pragmatic revision that balances protecting personal information with the need to leverage data for innovation and societal benefit.

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In an ever uncertain and increasingly dangerous world, the EU must lead the way in tackling global challenges, using science and technology for the benefit of humanity.

European Commission President, Ursula von der Leyen, has vowed to make this happen, publicly proclaiming that the EU ‘aims to put research and innovation, science, and technology at the heart of Europe’s economy’.

This would also go a long way towards fulfilling another one of von der Leyen’s key second term objectives – reinvigorating European industrial competitiveness. Yes, ‘innovation’ and ‘competitiveness’ have always been particularly popular buzzwords in the Brussels lexicon but right now they’re truly capturing the zeitgeist, especially following a plethora of reports from the likes of Enrico Letta and Mario Draghi, to name but two.

And the EU’s Framework Programme for Research and Innovation (R&I) – the largest R&I funding programme in the world – is one of the most potent tools in the EU’s arsenal to achieve all these lofty ambitions. With the end of the ninth Framework Programme, Horizon Europe, looming, ahem, on the horizon, the tenth (FP10) is scheduled to run from 2028-34.

FP10 presents the perfect opportunity to restore and relaunch Europe’s leading role in scientific breakthroughs and groundbreaking innovation for everyone’s benefit. Even with a few years still to go before launch, now is the moment to really begin hammering down and agreeing an ambitious vision and structure for FP10.

With all this in mind, CEPS recently published a comprehensive report (supported by Imperial College London and the Wellcome Trust) on how the EU’s leaders can do this. The vision it promotes for FP10 will require several reforms – and to be clear, enacting them won’t be a simple walk in the park. But they will be absolutely worth it in the end.

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In a time of increasingly pervasive digital technologies and the gradual disruption of the multilateral order, policymakers have at least one certainty – every single country needs a sovereign digital infrastructure encompassing compute resources, a resilient supply chain for semiconductors, secure digital identity and digital payment platforms, a well-functioning data layer for a variety of industrial and social uses, and abundant cloud and edge computing nodes. All of these will contribute to propelling the digital transformation forward, from government to large factories, all the way to connected objects.

Such infrastructure is becoming the central nervous system of our economy, as crucial as electricity, transport or water networks. It’s also increasingly crucial to make democracy work. Not having a well-developed digital technology stack condemns a country to economic decline and technological dependency, and a future at the mercy of foreign governments and private actors.

For Europe, this will be an uphill battle as we’ve accumulated many delays in key layers of the technology stack. We massively depend on less than a fistful of US cloud operators. Our supply of semiconductors craves rare earths that are quasi-monopolised by China. We are dwarfed by other global powers when it comes to AI, cyber-security solutions and overall Research and Innovation (R&I) spending in the complex new technologies that compose the stack.

We train busloads of leading tech researchers and yet we see so many of them leaving to make their fortune on other shores. And even when we do act, fragmentation, ineffective regulation and fruitless competition further hamper our efforts, depriving our businesses of the scale and support they need to thrive. We have known this for a long time – and we’ve repeatedly called for bold action.

The Draghi report was just the latest wake-up call. A call for urgent, bold measures. And there’s really no time to lose.

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The virus of national selfishness is degrading international relations towards distrust, hostility and confrontation. In response, we need a highly visible multilateral initiative that clearly promotes justice and the common good of humankind rather than merely the self-interest of those who launch it.

One promising area for such an initiative is the health sector. With pandemics, drug resistance, pollution and global warming all increasingly threatening human health around the globe, collaborative efforts can protect health worldwide. Suppressing disease in one country can reduce health risks in others; therapeutics and diagnostics developed for use in one country can (and should) benefit all people around the world.

Another auspicious area is our shared planetary environment, which is increasingly threatened and degraded by human pollution. Here too, the potential benefits of international collaboration are exceptionally large as polluting activities – and efforts to reduce and contain pollution – affect all life on our planet, now and far into the future.

Seemingly separate at first glance, these two areas actually overlap. The ecological crisis damages human health, destroys biodiversity and spoils the environment and climate for future life on our planet. That’s why an initiative placed firmly within this overlap would make a lot of sense.

One such initiative is the creation of an Ecological Impact Fund (EIF), which would incentivise and reward the development of green technologies for, and their deployment in, a defined set of lower-income countries (‘the EIF-Zone’). The EIF would make preannounced annual disbursements, to be divided among registered new green technologies. This division would be based on how much pollution-based harm was averted with each of these technologies in the EIF-Zone during the preceding year — with harm assessed as a weighted sum of greenhouse gas emissions (CO2eq) and lost quality-adjusted life years (QALYs).

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The transition to a cost-effective net-zero economy by 2050 is essentially about electrification. Electricity is relatively easy to decarbonise – it can be produced domestically and is up to three times more efficient than combustion. As in other areas, China is leading the way, electrifying at a rate of one percentage point each year. In contrast, the EU’s electrification rate is stagnating at 23 %.

The future competitiveness of EU industry sectors will critically depend on large volumes of affordable low-carbon electricity. Alas, investment in renewable energy is slowing while costs are only increasing.

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