I. Commission Proposes Critical Medicines Act to Strengthen Pharmaceutical Supply and Resilience in the EU
In a significant step toward securing the availability of essential medicines, the European Commission has proposed a new Regulation—the Critical Medicines Act—aimed at reinforcing the EU’s pharmaceutical supply chain. This initiative seeks to reduce the Union’s external dependencies, enhance resilience, and provide timely access to vital medicines for all EU citizens.
Recent health crises, including the COVID-19 pandemic and ongoing geopolitical tensions, have exposed the EU’s vulnerabilities in accessing critical medicines. Shortages driven by manufacturing issues, concentrated supply chains, and global competition have highlighted the need for a coordinated EU response. The proposed Act is designed as an industrial policy instrument to address these challenges by encouraging greater production within the EU and promoting supply chain diversification.
The Critical Medicines Act is a key pillar of the European Health Union and complements ongoing pharmaceutical reforms. It focuses on medicines and active ingredients with limited sources of supply, ensuring the EU is better prepared to meet healthcare demands and manage potential shortages.
Key components of the Critical Medicines Act include:
- Strategic Projects to build, expand, or modernise EU manufacturing capacity for critical medicines and their ingredients. These projects will benefit from streamlined regulatory procedures and improved access to funding.
- Updated State Aid Guidelines to help Member States provide financial support to relevant industrial initiatives.
- Resilient Public Procurement practices requiring the inclusion of criteria such as diversified sourcing and supply chain monitoring for critical medicines, with preference given to EU-based production in cases of over-reliance on a few suppliers.
- Joint Procurement Mechanisms, enabling Member States to pool purchasing power and improve access to critical and commonly needed medicines across the EU.
- International Partnerships with like-minded countries to broaden the pharmaceutical supply base and reduce strategic dependencies.
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II. Commission Refers Spain to EU Court Over Discriminatory Tax Treatment of Non-Residents
The European Commission has referred Spain to the Court of Justice of the European Union (CJEU) for failing to align its tax legislation with EU rules on the free movement of capital, as set out in Article 63 of the Treaty on the Functioning of the European Union (TFEU). At issue is Spain’s unequal tax treatment of resident and non-resident taxpayers regarding capital gains tax deferral.
Under current Spanish law, resident taxpayers benefit from the option to defer capital gains tax when payments for transferred assets are delayed beyond one year or made in instalments. This deferral allows taxes to be paid incrementally as payments are received, offering a more flexible and cash flow-friendly approach.
In contrast, non-resident taxpayers do not have access to this deferral mechanism. They are required to pay the full tax amount immediately upon the accrual of capital gains, regardless of the actual timing of the payment. This results in a significant cash flow disadvantage and constitutes discriminatory treatment under EU law.
Following a letter of formal notice sent in December 2021 and a reasoned opinion issued in May 2024, the Commission has determined that Spain’s responses and justifications have been insufficient. Despite technical discussions, the Spanish authorities have maintained that their legislation complies with EU law.
The Commission argues that this differential treatment imposes an unjustified barrier to cross-border investment and undermines the EU’s objective of ensuring the free movement of capital across Member States. The legal action now taken reflects the Commission’s commitment to upholding equal treatment for all taxpayers within the Single Market.
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III. Commission Unveils Simplification Package to Cut Red Tape and Boost Investment
The European Commission has presented a comprehensive package of proposals aimed at simplifying EU rules, reducing regulatory burdens, and enhancing investment capacity. The initiative is part of the EU’s broader competitiveness agenda and is expected to deliver €6.3 billion in annual administrative savings and unlock €50 billion in additional public and private investment.
With a goal to reduce administrative burdens by 25% overall and 35% for SMEs, this “Omnibus” package brings together reforms across sustainability reporting, sustainable finance, due diligence, the EU Taxonomy, the Carbon Border Adjustment Mechanism (CBAM), and investment programmes.
Key reforms include:
Sustainability Reporting (CSRD & EU Taxonomy):
- Exempt ~80% of companies from CSRD obligations by focusing on the largest firms.
- Postpone reporting for in-scope companies by two years.
- Simplify and scale back EU Taxonomy reporting, reduce templates by 70%, and introduce financial materiality thresholds.
- Allow reporting of partially aligned activities and streamline the “Do No Significant Harm” criteria.
Due Diligence (CSDDD):
- Focus due diligence on direct business partners and extend review intervals from annual to every five years.
- Reduce obligations on SMEs and small mid-caps in value chains.
- Remove EU-level civil liability while preserving victims’ rights under national regimes.
- Delay compliance for the largest firms until July 2028.
Carbon Border Adjustment Mechanism (CBAM):
- Introduce a 50-tonne threshold to exempt 90% of importers (mostly SMEs).
- Simplify emissions calculations and reporting.
- Strengthen anti-circumvention measures and prepare for future CBAM scope expansion.
Investment Programmes:
- Optimise InvestEU and legacy funds to mobilise €50 billion in new investments.
- Ease Member State participation and simplify requirements for intermediaries and SMEs.
- Generate an estimated €350 million in cost savings for programme users.
Next Steps:
The proposals will now undergo review by the European Parliament and Council. The Commission has urged fast-track treatment, especially on key reporting deferrals, to address pressing stakeholder concerns.
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IV. EU Launches Clean Industrial Deal to Drive Competitiveness and Decarbonisation
The European Commission has unveiled the Clean Industrial Deal, a strategic initiative to strengthen the competitiveness and resilience of EU industry while accelerating the green transition. This business-oriented plan addresses rising energy costs and global competitive pressures by positioning decarbonisation as a key driver of sustainable industrial growth.
The Deal targets two sectors at the heart of industrial transformation: energy-intensive industries and clean technologies, with circularity and resource efficiency as core principles. It aims to give European businesses the tools, regulatory clarity, and financial backing needed to lead the global race towards a decarbonised economy.
Key measures of the Clean Industrial Deal include:
- Affordable Energy for Industry: A new Action Plan on Affordable Energy will lower bills, promote clean energy deployment, complete internal energy markets, and cut fossil fuel dependency.
- Boosting Demand for EU Clean Products: Through the Industrial Decarbonisation Accelerator Act, the Commission will introduce sustainability and “Made in Europe” criteria in public procurement. It will also launch a voluntary carbon intensity label, starting with steel in 2025.
- Mobilising €100 Billion for Clean Transition: The Deal includes new state aid frameworks, a proposed Industrial Decarbonisation Bank, and expanded InvestEU tools. The EIB Group will back manufacturing, PPAs, and clean tech projects with new financing instruments.
- Securing Critical Raw Materials & Promoting Circularity: The EU will create a Critical Raw Material Centre for joint purchases and adopt a Circular Economy Act in 2026. The goal is for 24% of materials used in the EU to be circular by 2030.
- Global and Trade Strategy: The Commission will launch Clean Trade and Investment Partnerships and strengthen trade defence tools, including a simplified Carbon Border Adjustment Mechanism (CBAM).
- Investing in Skills & Workforce: A new Union of Skills will support training and job transitions, with €90 million from Erasmus+ allocated to reinforce sector-specific capabilities.
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V. Commission Opens Consultation on Antitrust Rules for the Automotive Sector
The European Commission has launched a public consultation inviting feedback on the functioning of EU competition rules applicable to vertical agreements in the motor vehicle sector. The consultation is part of the ongoing evaluation of the Motor Vehicle Block Exemption Regulation (MVBER) and the related Supplementary Guidelines (SGL), alongside broader vertical rules under the Vertical Block Exemption Regulation (VBER) and Guidelines on vertical restraints.
These rules help companies in the automotive industry assess the compatibility of their distribution and servicing agreements with EU competition law (Article 101(1) TFEU). The MVBER and SGL, both amended in April 2023 to reflect recent technological advances, are currently valid until 31 May 2028.
This consultation aims to:
- Assess how the 2023 updates to the SGL are functioning.
- Evaluate the current state of competition in the automotive sector.
- Anticipate market trends, including digitalisation and changing mobility patterns, up to 2028.
This initiative complements the Strategic Dialogue on the Future of the Automotive Industry, launched in January 2025. The upcoming Action Plan will focus on sectoral priorities such as talent, innovation, resource access, and regulatory predictability—while the MVBER review secures a competitive aftermarket environment.
Key Milestones:
- Deadline for submissions: 23 May 2025
- Contributions will be published in their original language on the Commission’s “Have your say” portal.
- The evaluation will also involve national competition authorities and a sector study led by the Joint Research Centre, focusing on digital transformation indicators.
Next Steps:
Following the consultation, the Commission will publish a summary of the feedback and proceed to a policy-making phase in 2026 to determine the future of the MVBER.
For more information and to submit contributions, stakeholders are encouraged to visit the European Commission’s “Have your say” portal.
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VI. EU Urges Scrutiny of Outbound Investments to Safeguard Economic Security
The European Commission has issued a Recommendation calling on Member States to evaluate outbound investments by EU companies in high-risk strategic technologies—specifically semiconductors, artificial intelligence (AI), and quantum technologies. This marks a critical step in the EU’s broader Economic Security Strategy, aimed at protecting key innovations from misuse abroad and mitigating potential threats to the Union’s economic resilience.
While the EU has already established mechanisms for screening inbound foreign direct investment, this initiative shifts the focus to outbound capital flows—recognizing that European technological know-how could be transferred to geopolitical competitors or hostile regimes. The goal is to affirm that EU-originating investments do not inadvertently empower actors that could undermine Europe’s security and strategic autonomy.
The Recommendation follows extensive stakeholder consultations and builds on the Commission’s earlier White Paper. It tasks Member States with reviewing transactions made since January 1, 2021, as well as ongoing investments, across the three sensitive tech sectors. The review process is to be conducted in collaboration with relevant stakeholders and is expected to last 15 months.
To guide this assessment, the Commission has provided a framework developed in consultation with the Expert Group on Outbound Investments. Member States are expected to report progress by 15 July 2025 and submit a full implementation report, including risk findings, by 30 June 2026.
This initiative also aligns with global efforts to enhance economic security. The Commission has expressed its intention to strengthen coordination with international allies to guarantee a consistent approach to outbound investment screening.
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VII. EU Unveils Competitiveness Compass to Reclaim Global Edge and Drive Sustainable Growth
The European Commission has launched the Competitiveness Compass, its first major initiative of the current mandate, charting a strategic path to restore Europe’s economic dynamism and global standing. Designed as a comprehensive roadmap, the Compass builds on the Draghi Report and aims to position the EU as the global hub for innovation, clean technologies, and future-proof industries, while advancing climate neutrality.
President Ursula von der Leyen emphasized the urgency of action: “Europe has what it takes to lead—but we must fix our weaknesses. We now have a plan, the political will, and consensus. The time for action is now.”
The Compass identifies three priority areas for transformation:
- Innovation: The EU will reignite its innovation ecosystem by supporting start-ups, scaling industrial deep-tech, and encouraging technology diffusion. Initiatives such as AI Gigafactories and a dedicated Start-up and Scale-up Strategy will simplify regulatory hurdles and foster a more cohesive Single Market for innovators.
- Decarbonisation: Addressing high energy costs, the EU will introduce a Clean Industrial Deal and an Affordable Energy Action Plan. These aim to make the EU an attractive location for clean manufacturing, particularly in energy-intensive sectors like steel and chemicals.
- Security and Strategic Autonomy: To reduce dependency and bolster supply chain resilience, the EU will deepen global trade ties and review procurement rules to favor critical sectors. New Clean Trade and Investment Partnerships will secure access to key resources.
Supporting these pillars are five horizontal enablers: regulatory simplification, improved Single Market integration, access to capital through a European Savings and Investments Union, investment in skills and quality jobs, and enhanced coordination between EU and national policies. A new Competitiveness Coordination Tool and Competitiveness Fund will drive implementation.
Alber & Geiger can help organizations voice their interests and concerns to EU policymakers.