In the picturesque setting of a remote Belgian castle, European Union leaders are convening for a summit focused on competitiveness, a meeting described as a "leaders' retreat." This pastoral backdrop, however, masks the urgent and formidable challenges facing Europe in an increasingly volatile global landscape.
A Continent Under Pressure
Europe has not felt this insecure since the postwar era. The America First policies of the Trump administration have signalled a clear intent to exert economic pressure through tariffs and threats, undermining the reliability of the transatlantic alliance for defence. Simultaneously, intense hi-tech competition from China poses a significant risk to European industries striving to keep pace in critical areas, such as the green transition. Compounding these external pressures, support for far-right movements is rising across the European Union.
The Call for a New Industrial Strategy
Against this sombre backdrop, French President Emmanuel Macron has championed the idea that business as usual is no longer viable. He, along with other proponents, is advocating for a more assertive "Made in Europe" industrial strategy, which is set to dominate the summit's discussions. This approach seeks to prioritise European production and jobs in strategic sectors.
European Commissioner for Industrial Strategy, Stéphane Séjourné, emphasised this point in a recent intervention signed by hundreds of business leaders, stating: "Whenever European public money is spent in Europe, it must contribute to European production and quality jobs." This sentiment aligns with existing EU initiatives like Security Action for Europe (Safe), a joint defence-procurement scheme that mandates the majority of purchases come from EU members or closely associated countries.
Divisions and Dilemmas
Unsurprisingly, this push for a "European preference" has met with scepticism. Given the EU's longstanding commitment to global free trade and aversion to protectionism, critics have voiced concerns. German car manufacturers, with their extensive worldwide operations, have expressed apprehension. Baltic and Nordic member states have warned of potential retaliation from third countries.
Further opposition comes from German Chancellor Friedrich Merz, a former BlackRock executive, who has joined forces with Italian Prime Minister Giorgia Meloni. They propose an alternative growth agenda centred on deregulation and limiting the scope of Brussels' bureaucracy. These divisions highlight the complex dilemmas involved in crafting such a strategy.
Calibrating the Approach
Any "buy-European" policy would require careful calibration to ensure that the benefits in terms of job creation and strategic autonomy are not overshadowed by geopolitical drawbacks. However, if combined with significant investment in areas like green technology and tech—as advocated by former European Central Bank President Mario Draghi—it could empower the EU to leverage its single market of 450 million people more effectively.
Levelling the Playing Field
In a world increasingly defined by transactional politics, the priority for Brussels and European capitals must be to address the skewed economic playing field with Washington and Beijing. As Commissioner Séjourné pointedly asks: "The Chinese have 'Made in China', the Americans have 'Buy American', and most other economic powers have similar schemes … So why not us?" This question underscores the growing consensus that Europe must assert its economic interests to secure its future in a competitive global arena.
