European leaders agreed to implement “Buy European” measures during their summit focused on protecting Europe’s strategic industrial capabilities. The gathering at a 16th-century Belgian castle brought together all 27 member states to address how Europe can maintain technological leadership and industrial capacity amid intense global competition.
Commission President Ursula von der Leyen’s comprehensive action plan promises to address European competitiveness through multiple channels. Regulatory simplification aims to eliminate unnecessary bureaucracy while maintaining important protections. She criticized “too much gold-plating” where member states add extra regulations atop EU rules, creating complexity that disadvantages European businesses against American or Chinese competitors who face more streamlined regulatory environments. Her truck weight example—44 tonnes permitted in Belgium but only 40 tonnes in France—illustrates how national variations create unnecessary costs for businesses operating across borders.
The EU Inc framework represents a potentially revolutionary reform. Currently, startups wanting to operate across Europe must navigate 27 different national corporate law systems, each with its own formation procedures, governance requirements, and reporting obligations. This fragmentation makes it difficult for European startups to scale across the continent as easily as American startups can scale across the United States. EU Inc would create a European corporate form that operates seamlessly across all member states, making it as straightforward to establish a pan-European company as to establish a company in a single member state. This could significantly reduce barriers facing European entrepreneurs and help European startups compete against American tech giants.
Capital market integration aims to address Europe’s chronic difficulty mobilizing savings for productive investment. Europe has enormous household savings—Europeans are actually more inclined to save than Americans—but these savings remain trapped in fragmented national banking systems or flow abroad to American capital markets. European pension funds and insurance companies often invest in American rather than European companies because American capital markets offer better liquidity and transparency. This means European savings fund American rather than European innovation, transferring wealth and ultimately strategic control to American jurisdiction. Integrated European capital markets would create European alternatives that could keep European savings working for European prosperity.
The summit addressed energy price reductions, which are essential to European industrial competitiveness. Since the loss of Russian gas, European energy prices have been significantly higher than American or Asian prices, creating major cost disadvantages for energy-intensive industries like chemicals, steel, aluminum, and glass. Some European factories have shut down or relocated to the United States where lower energy costs make operations more profitable. The Inflation Reduction Act passed by the American Congress compounds this problem by offering massive subsidies for green investments in the United States, creating additional incentives for European companies to invest across the Atlantic rather than at home. Europe needs comprehensive strategies to reduce energy costs through renewable energy deployment, energy efficiency improvements, and infrastructure investments that would enable more efficient energy markets.
Photo by Christophe Licoppe, via wikimedia commons