Given the daunting nature of the challenges they face in the era of Donald Trump, it is perhaps understandable that European politicians should wish to get away from it all. This week, in what is being billed as a “leaders’ retreat”, a remote castle in the Belgian countryside has been selected for an EU summit on competitiveness. The pastoral setting may soothe the spirits of attending heads of state; but it belies the urgency of the debate they need to have.
Europe in the postwar period has never felt so insecure. Mr Trump’s America First administration has made clear its intention to bully the continent economically through tariffs and threats, and the transatlantic alliance can no longer be relied upon for its defence. Hi-tech competition from China threatens to overwhelm European industry’s attempts to keep up in key areas, such as the green transition. Across the European Union, support for the far right is on the rise.
Against this sombre backdrop, the French president, Emmanuel Macron, is surely right to suggest that business as usual cannot be an option. He and others are pushing for a newly assertive “Made in Europe” industrial strategy, versions of which will dominate the summit’s agenda. On defence, this is already the EU’s direction of travel: Security Action for Europe (Safe), its new joint defence-procurement scheme, mandates that the lion’s share of purchases are made from EU members, or closely associated countries.
In a newly volatile world, that makes obvious sense. Mr Macron argues that the same “European preference” criterion should be applied more broadly across strategic sectors, a view shared by the European Commission. In a recent intervention signed by hundreds of business leaders, the commissioner for industrial strategy, Stéphane Séjourné, wrote: “Whenever European public money is spent in Europe, it must contribute to European production and quality jobs.”
Unsurprisingly, given the EU’s traditional commitment to global free trade, and hostility to any whiff of protectionism, sceptics have been quick to push back. German carmakers, whose manufacturing operations are worldwide, have voiced their concerns. Baltic and Nordic member states have sounded the alarm over potential retaliation by third countries. The German chancellor, Friedrich Merz, a former BlackRock executive, has teamed up with Italy’s prime minister, Giorgia Meloni, to put forward an alternative growth agenda based on deregulation and restricting the scope of Brussels bureaucracy.
Such divisions encapsulate the dilemmas involved. Any “buy-European” approach would certainly need to be carefully calibrated to ensure that benefits in terms of jobs and strategic autonomy are not outweighed by geopolitical downsides. But, if combined with turbo-charged investment in areas such as green technology and tech – as the former president of the European Central bank, Mario Draghi, has consistently advocated – it could give the EU the self-confidence, and the means, to properly leverage a single market of 450 million people.
In a brutally transactional world, the priority in Brussels and European capitals must be to find a way to level a skewed economic playing field with Washington and Beijing. As Mr Séjourné puts it: “The Chinese have ‘Made in China’, the Americans have ‘Buy American’, and most other economic powers have similar schemes … So why not us?” It’s a good question.
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