The European Union’s 27 leaders agreed to implement a “Buy European” policy framework during their summit addressing Europe’s industrial competitiveness challenges. The meeting at a moated castle in eastern Belgium focused on how Europe can protect strategic sectors while maintaining commitments to rules-based international trade.
The policy shift toward European preference reflects converging pressures that have transformed European economic thinking. The 2022 loss of Russian gas exposed dangerous energy dependencies that European leaders had dismissed as economically efficient interdependence. Donald Trump’s trade wars demonstrated that even close allies might suddenly impose tariffs and demand one-sided concessions. China’s industrial policies involve massive state subsidies that enable Chinese companies to sell below cost, capture market share, and eliminate European competitors in strategic sectors ranging from solar panels to electric vehicles to advanced manufacturing equipment.
António Costa told reporters that leaders reached “broad agreement on the need to use” European preference “in selected strategic sectors in [a] proportional and targeted way.” He identified defense, space, clean technology, quantum computing, artificial intelligence, and payment systems as areas requiring protection and reinforcement. This list encompasses both traditional national security concerns like defense and space, and newer economic security concerns like clean tech and AI where European technological leadership is considered essential to future prosperity and autonomy.
Ursula von der Leyen promised an action plan by March that goes far beyond procurement preferences. Regulatory simplification aims to eliminate unnecessary bureaucratic burdens that make European businesses less competitive. She criticized “too much gold-plating” where member states add extra layers of regulation atop EU rules, creating unnecessary complexity. Her example of trucks allowed to weigh 44 tonnes in Belgium but only 40 tonnes in France illustrates how national variations create costly complications for businesses operating across borders. The EU Inc framework would allow startups to incorporate once at European level rather than navigating 27 different national systems, making it as easy to scale a startup across Europe as within a single country.
The summit addressed capital market integration, which aims to pool European savings for productive investment rather than leaving them trapped in fragmented national systems. Europe has enormous household savings but struggles to mobilize them efficiently for investments in green energy, digital infrastructure, and innovative startups. American capital markets excel at channeling savings toward high-growth companies, helping American startups scale rapidly and dominate global markets. European capital market fragmentation means European startups often must seek American venture capital or list on American stock exchanges to access growth capital, transferring wealth and control to American investors and ultimately American jurisdiction.
