In the picturesque setting of a remote Belgian castle, European Union leaders gathered this week for what was billed as a "leaders' retreat" on competitiveness. The pastoral surroundings, however, starkly contrasted with the urgent and formidable challenges facing the continent in an increasingly volatile global landscape.
A Continent Under Pressure
Postwar Europe has never experienced such profound insecurity. The America First policies of the Trump administration have explicitly targeted the continent with economic bullying through tariffs and threats, severely undermining the reliability of the transatlantic alliance for defence. Simultaneously, fierce hi-tech competition from China threatens to overwhelm European industries' efforts to keep pace in critical areas, particularly the green transition. Compounding these external pressures, support for far-right political movements is rising across the European Union.
The Call for a New Industrial Strategy
Against this sombre backdrop, French President Emmanuel Macron has emerged as a leading voice arguing that business as usual is no longer viable. He, along with other key figures, is championing a newly assertive "Made in Europe" industrial strategy. This initiative is set to dominate the summit's agenda, with various versions under discussion. On the defence front, this strategic shift is already underway. The EU's new joint defence-procurement scheme, Security Action for Europe (Safe), mandates that the majority of purchases must originate from EU member states or closely associated nations.
In today's unpredictable world, this approach makes clear strategic sense. President Macron advocates for extending this "European preference" criterion more broadly across key strategic sectors, a perspective shared by the European Commission. In a recent intervention signed by hundreds of business leaders, European Commissioner for Industrial Strategy Stéphane Séjourné emphasized: "Whenever European public money is spent in Europe, it must contribute to European production and quality jobs."
Navigating Internal Divisions
Unsurprisingly, given the EU's longstanding commitment to global free trade and inherent hostility toward protectionism, sceptics have been quick to voice opposition. German automotive manufacturers, whose operations span the globe, have expressed significant concerns. Baltic and Nordic member states have raised alarms about potential retaliation from third countries. German Chancellor Friedrich Merz, a former BlackRock executive, has joined forces with Italian Prime Minister Giorgia Meloni to propose an alternative growth agenda centered on deregulation and limiting the scope of Brussels' bureaucratic reach.
Calibrating a Strategic Response
These internal divisions highlight the complex dilemmas involved. Any "buy-European" approach would require careful calibration to ensure that benefits in terms of job creation and strategic autonomy are not outweighed by geopolitical repercussions. However, if combined with accelerated investment in areas such as green technology and advanced tech—as consistently advocated by former European Central Bank President Mario Draghi—this strategy could provide the EU with both the self-confidence and the practical means to effectively leverage its single market of 450 million people.
In an increasingly transactional global environment, the priority for Brussels and European capitals must be to level a skewed economic playing field dominated by 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 resonates powerfully as Europe seeks to redefine its economic sovereignty and strategic independence in a rapidly changing world.
