competitiveness roadmap<\/a>, based on the Draghi and Letta reports, aims to complete the EU single market by 2027. It also redirects public procurement and industrial funding towards EU-based production in strategic sectors: defence, clean tech, chips, chemicals and automotive. <\/p>\nThe Commission describes this as Europe\u2019s answer to America\u2019s Buy American policy. But unlike Washington, Brussels has to balance the interests of 27 different economies while following both WTO rules and its own open trade policies. <\/p>\n
A proposal was expected before Christmas, but it was withdrawn because member states could not agree. The leaders\u2019 summit sent a political message but did not produce any new laws. <\/p>\n
Between the lines: The defence exception<\/p>\n
On one sector, there is rare consensus. Gunnar Wolf, professor of economics at the Free University of Brussels and senior fellow at Bruegel, draws a firm line. <\/p>\n
\u201cWe benefit from US weapons. But these purchases also make us vulnerable to geopolitical leverage of the United States against Europe… in hard security, I think there’s a clear case to buy more European.\u201d <\/p>\n
\u201cStrategic autonomy means you have to have the technology made in Europe because otherwise you will have built dependencies on other players.\u201d <\/p>\n
However, Wolf is much more sceptical about other sectors. <\/p>\n
\u201cWe need to be extremely careful that this doesn\u2019t just become a protectionist policy set. If you protect your domestic industry without any competition, what you achieve in the end is a lack of innovation and that will be bad for growth.\u201d <\/p>\n
For Wolf, success is not about market share or supply-chain numbers. He says, \u201cgrowth of new, interesting, innovative firms, productivity growth, employment growth… that\u2019s what we ultimately need.\u201d <\/p>\n
The honest diagnosis<\/p>\n
Alberto Alemanno, Professor of Law at HEC Paris University, gives a straightforward reality check. <\/p>\n
\u201cThe EU has neither the industrial base nor the supply chains to go it alone in most sectors. A blanket preference would increase costs for downstream industries.\u201d <\/p>\n
\u201cA targeted one in genuinely strategic sectors is defensible but only if ‘strategic’ is defined through rigorous analysis, not political convenience – as it appears to be the case now.\u201d <\/p>\n
The divisions within the EU are already clear. France wants strict local-content rules. Germany prefers a more flexible \u201cMade with Europe\u201d idea that includes trade partners like Canada, the UK, and Norway. Smaller, trade-focused countries worry they will bear the costs while France and Germany get most of the benefits. <\/p>\n
\u201cThe real tension is between two clusters of states,\u201d Alemanno says. \u201cSmaller member states fear it will raise costs and benefit mainly large economies.\u201d <\/p>\n
The supply-chain challenge<\/p>\n
Fredrik Erixon, director of the European Centre for International Political Economy, explains the practical challenges, and his view is sobering. <\/p>\n
\u201cIt’s not that easy to introduce these types of restrictions… Europe is also importing a lot from other countries, which European companies use to export again to other countries. So, if you put in a restriction that is going to lead to a higher cost for you. That is also going to increase the price of European exports.\u201d <\/p>\n
His example cuts to the heart of the problem: a German company building a wind farm in the UAE, with components produced across multiple countries. In this case, \u201cEuropean preference\u201d is unclear, especially if the UAE government requires local production to award the contract. <\/p>\n
\u201cThis is going to be very, very difficult to come up with the exact details for this, [to know] how this is going to work.\u201d <\/p>\n
Erixon also points out the problem with allies. The EU exports more of these goods than it imports. If Europe excludes Canada, the UK, or Mercosur partners, they could respond with similar restrictions, which would hurt Europe more. <\/p>\n
\u201cWe need to have sort of a trusted partnership system that comes along with it, which enables our close allies and close friends to participate in this, so we don’t shut them out, because if they do, they’re going to respond with a similar measure against us. So, we’re going to be a net loser at them because we export more of these types of goods to them than we import.\u201d <\/p>\n
What\u2019s next<\/p>\n
The Commission\u2019s mid-March proposal on \u201cBuy European\u201d is expected to target selected strategic sectors with tiered EU value-added thresholds, possibly 60-80%, alongside a trusted-partner carve-out for allied nations. <\/p>\n
Nine member states, including Sweden, Finland, Ireland and Estonia, have already warned in a joint letter that any preference must be a last resort, time-limited and sector-specific. <\/p>\n
The political deal seems to have been struck, but the technical details are not in place. <\/p>\n","protected":false},"excerpt":{"rendered":"The European Commission is set to table a sweeping \u201cOne Europe, One Market\u201d action plan at the March…\n","protected":false},"author":3,"featured_media":617849,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5],"tags":[8295,253955,16446,25821,98288,50,2856,103],"class_list":["post-617848","post","type-post","status-publish","format-standard","has-post-thumbnail","category-world","tag-competitiveness","tag-enrico-letta","tag-european-commission","tag-friedrich-merz","tag-mario-draghi","tag-news","tag-ursula-von-der-leyen","tag-world"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116137800970787251","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/617848","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=617848"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/617848\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/617849"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=617848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=617848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=617848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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