CEOs want to tear up Europe’s regulatory rules, Trump-style

European business leaders watched with envy as President Donald Trump rolled back a number of regulations on Monday, with growing calls for similar moves on the continent.

On his first day in office, Trump wasted no time announcing the streak executive orders designed to support key industries, including curbing electric vehicle production targets and accelerating oil and gas production.

The returning president has long argued that regulation stifles U.S. innovation and competitiveness, campaigning for a second term on promises to eliminate red tape. And in the face of a more assertive US and intensifying global rivalry, European business leaders are taking that view.

Morten Virod, CEO of a Swiss robotics company ABBwarned that over-regulation and the associated high costs were pushing cross-border businesses to move to other markets, ultimately threatening to “de-industrialise Europe”.

“We need to clearly reset regulation and let business do it,” Virod told CNBC’s “Squawk Box Europe” at the World Economic Forum in Davos, Switzerland.

Virod added that European Union rules, while often well-intentioned, have become too bureaucratic and need to be simplified to give firms the flexibility they need to innovate and grow.

“Every regulation is put in place with good intentions. But when you take and put everything together, it becomes too much. It becomes too complicated,” he said.

Dutch bank INGDirector-General Steven van Reiswijk agreed that the bloc needed to simplify and harmonize regulation to boost investment and productivity, a growing challenge for the continent.

“There’s a lot of investment that needs to be made in infrastructure, a lot of investment that needs to be made in Europe’s strategic autonomy, when it comes to technology infrastructure, that’s what needs to be stimulated,” he said.

However, Borje Ekholm, CEO of the Swedish telecommunications company Ericksonsaid that Europe’s “regulatory first approach” has no merit, arguing that it holds back technological progress.

“I don’t think you can be a leader in regulation, I don’t think it creates value,” he said. “Where you have to be a leader is in innovation, you need a structure that supports innovation. That’s where the US has been really successful – Europe needs that.”

European policymakers seem to recognize the need for innovation and deregulation in the face of growing economic competition and rivalry from the US and China, but have so far been slow to move.

Insurance Zurich CEO Mario Greco said Europe must “wake up” if it is to compete with other global markets, especially now with the new US administration.

“Europe is always lagging behind. It is always busy with itself,” he said.

“In a world that is moving very fast, with a lot of innovation, this is yet another wake-up call for Europe,” he added.

Swiss pharmaceutical company Novartis CompanyCEO Vas Narasimhan agreed it was a “big moment” for Europe, arguing that the bloc faced a fork in the road with two quite different outcomes.

“Europe has to decide now – in a world where the US is deregulating so much and trying to increase competitiveness – whether Europe will continue to sit back, continue to increase regulation in the Commission, increase regulation in various individual countries. Or, finally, we will get a more competitive and innovative environment in Europe,” he said.

“We’ll have to see. History shows that while there’s a lot of talk, the Commission doesn’t take much action. And now is the moment.”

One CEO who expressed more optimism about Britain and Europe’s efforts to boost sluggish economic growth was Barclays CEO Venkatakrishnan.

“Obviously (the U.S.) has put in a lot of control and regulation over the last few years, and we think that’s going to be loosened. This is generally good for business sentiment and for business opportunities,” he said.

“And we think those winds are blowing towards Europe and the UK, where you’re seeing governments understand what’s going on in the US and try to see what aspects of their own regulation they need to relax.”

“One can hope,” he added.