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Ireland’s Prime Minister Micheál Martin has called for the European Union to prioritize innovation over excessive regulation, warning that the bloc risks falling behind the United States and China in the global technology race.

“We will see hopefully slower regulatory impulses but also a simplification of regulation,” Martin told Bloomberg TV on Saturday. He cautioned that over-regulation could stifle businesses and paralyze key sectors of the economy, making it harder for Europe to remain competitive.

The EU is facing mounting economic challenges, including the looming threat of tariffs from U.S. President Donald Trump, which could further strain transatlantic trade. Former European Central Bank President Mario Draghi has warned that without urgent action to boost productivity, Europe could be headed for a period of “slow agony.” Meanwhile, French President Emmanuel Macron recently declared that the EU “could die” if it sticks to its traditional economic strategies.

While acknowledging these risks, Martin remained optimistic, noting that European leaders recognize the need to pivot toward innovation rather than rely solely on regulatory frameworks. “Europe is well positioned for the AI revolution. We just need to grab it,” he said.

Ireland Caught in the Crossfire of Trade Tensions

For Ireland, staying competitive is particularly critical given its reliance on U.S. multinational companies that base their European operations in the country. The Irish Finance Ministry has repeatedly warned about the volatility of corporate tax receipts, which hit a record €38 billion ($39.9 billion) last year.

Ireland is also bracing for potential tariffs from the U.S., a concern that Martin acknowledged must be carefully managed. “We need to be careful that we don’t upset the rhythm of what is a good relationship,” he said, emphasizing the need for balanced trade discussions with Washington.

Trump’s nominee for Commerce Secretary, Howard Lutnick, has previously singled out Ireland, accusing it of running a trade surplus at America’s expense. However, Martin pushed back, arguing that the EU-U.S. trade balance is more even when considering both goods and services.

Strengthening U.S.-Ireland Relations

In an effort to navigate trade tensions and maintain strong U.S. ties, Ireland has set up a U.S.-based Strategic Economic Advisory Panel to provide insight on American economic policies. The country has also expanded its diplomatic presence in the U.S., focusing particularly on Republican-led states in the South.

Martin also highlighted the deep economic ties between Irish and American businesses, citing companies such as Ryanair Holdings Plc and Glanbia Plc, which have major dealings in the U.S. market.

As Europe wrestles with regulatory hurdles and economic headwinds, Martin’s message is clear—innovation, not bureaucracy, will determine the EU’s ability to compete in the rapidly evolving global economy.

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