European Union leaders committed to implementing “Buy European” policies to protect strategic sectors during their summit addressing Europe’s competitive position in the global economy. The gathering of all 27 member states at a historic Belgian castle focused on developing coordinated responses to challenges posed by unfair competition and strategic vulnerabilities.
Belgian Prime Minister Bart De Wever’s opening remarks set the tone by describing an “existential crisis” facing Belgium, France, Germany, and the Netherlands. Factory closures and declining investment threaten not just economic prosperity but the social contracts that underpin European political stability. High energy costs make energy-intensive manufacturing uneconomical in Europe. Excessive regulation creates bureaucratic burdens that make European businesses less agile than American or Asian competitors. Chinese dumping of unfairly subsidized goods undercuts European manufacturers, driving them out of business and creating dependencies on unreliable foreign suppliers.
European Council President António Costa confirmed that leaders reached consensus on using European preference “in selected strategic sectors in [a] proportional and targeted way.” This careful formulation reflects tensions between those who want aggressive protection of European industries and those who worry about triggering trade wars that could harm European exporters. The emphasis on “selected strategic sectors” aims to focus protection where it’s most needed—defense, space, clean tech, quantum, artificial intelligence, and payment systems—rather than applying blanket preferences that might be vulnerable to challenge at the World Trade Organization.
Commission President Ursula von der Leyen’s March action plan promises comprehensive competitiveness reforms. Regulatory simplification addresses complaints that European rules impose unnecessary costs and complexity. The EU Inc framework would revolutionize how startups can scale across Europe by allowing them to incorporate once at European level rather than navigating 27 different national corporate law systems. Capital market integration aims to create European alternatives to fragmented national systems that fail to mobilize European savings efficiently for productive investment in green and digital transformations. Energy price reductions address the cost disadvantages that have driven energy-intensive industries to relocate to the United States or Asia.
The summit’s focus on “Buy European” policies represents a broader questioning of European economic orthodoxy. For decades, European leaders championed free trade, open markets, and minimal industrial policy, believing that these approaches would maximize efficiency and prosperity. However, the painful vulnerabilities revealed by the Russian gas cutoff, American trade wars, and Chinese industrial policies have forced a rethinking. If competitors use state power to advance their economic interests while Europe maintains ideological purity about free markets, European industries will be destroyed and Europe will become dependent on potentially hostile powers for critical technologies and products. “Buy European” represents an acknowledgment that Europe needs to use state power strategically to protect vital interests, even if this means departing from free-market principles.