European Union leaders committed to comprehensive “Buy European” strategies aimed at building competitive advantage during their summit addressing Europe’s industrial future. The gathering of all 27 member states emphasized protecting strategic capabilities while pursuing regulatory reforms and market integration.
The summit addressed energy pricing, which has become a critical competitiveness issue since the loss of Russian gas. European energy prices remain significantly above American prices, creating major cost disadvantages for energy-intensive industries. American natural gas prices benefit from abundant domestic shale gas production, while European prices reflect dependence on expensive liquefied natural gas imports and the costs of rapidly developing renewable energy. These price differences have driven investment decisions, with energy-intensive industries like chemicals, steel, and aluminum increasingly favoring American locations over European ones.
Von der Leyen’s commitment to energy price reductions encompasses multiple strategies. Renewable energy deployment can reduce long-term costs once capital investments are recovered, though upfront costs are substantial. Energy efficiency improvements can reduce consumption, cutting costs while advancing climate goals. Infrastructure investments enabling better interconnection between national energy markets could allow more efficient allocation of resources. However, achieving substantial price reductions quickly enough to prevent further industrial exodus will require enormous investments and political will to overcome local opposition to infrastructure projects.
The summit also addressed fragmented capital markets that constrain European investment. Europe has large household savings but struggles to mobilize them efficiently for productive investment. 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, with European savers effectively financing competitors who then dominate European markets. American venture capital funds European startups, gaining influence over European technology development and capturing much of the value when successful startups are acquired or go public.
Capital market integration aims to create European alternatives that would keep European savings working for European prosperity. This requires harmonizing securities regulations across member states, creating pan-European stock exchanges or federating existing national exchanges, and establishing European pension and insurance frameworks that encourage investment in European rather than American markets. However, member states have long resisted full financial integration because they view financial regulation as important lever for national economic policy and are reluctant to cede control to European institutions.
The summit’s comprehensive agenda addressing procurement, regulation, energy, capital markets, and industrial policy simultaneously reflects recognition that European competitiveness requires addressing multiple constraints. No single policy change will restore European competitiveness if other obstacles remain. European preference in procurement won’t help European companies if energy costs make European production uneconomical. Regulatory simplification won’t enable European startups to scale if capital market fragmentation prevents access to growth capital. Energy price reductions won’t prevent industrial exodus if excessive regulation makes European operations uncompetitive. Only comprehensive approaches addressing multiple constraints simultaneously can hope to reverse Europe’s competitive decline.
