Incubating Integration in the 28th Regime with Regulatory Pilots

Few recent EU initiatives have attracted as much enthusiasm from founders and political leaders as the ‘28th regime’ – a single, opt-in European rulebook intended to simplify cross-border entrepreneurship. Its ambition is straightforward: to narrow Europe’s persistent innovation gap by reducing the legal fragmentation that hinders firms seeking to scale across member states.

That fragmentation carries significant costs. Companies face divergent national rules on insolvency, taxation, labour law and capital markets, among other areas. Yet resistance from member states to deeper integration in these domains is likely to confine the European Commission’s proposal for the regime to a comparatively narrow framework centred on company law. While politically feasible, such an approach would leave many of the regulatory barriers to scaling intact, limiting the regime’s economic impact.

The European Commission should use the current political momentum to develop a more ambitious single market instrument. Rather than postponing deeper integration to an uncertain future, it should pursue a dual strategy: 

1. Establish a robust company law core: Develop a broadly accessible and coherent rulebook, accompanied by safeguards to prevent regulatory arbitrage and to secure political support. 
2. Increase impact through regulatory pilots: Introduce targeted, time-limited pilots in areas where the economic gains from convergence are likely to be significant – including insolvency, labour mobility and accounting standards. These pilots would generate practical evidence to inform future integration in areas where progress has long stalled.

This approach would deliver immediate benefits for entrepreneurs while creating both the political space and the empirical foundation for deeper harmonisation. In doing so, it would strengthen not only the 28th regime itself but the functioning of the single market more broadly.