António Costa, the President of the European Council, has declared 2026 the "Year of European Competitiveness." The Draghi report—long since elevated to the status of a bible in Brussels—is titled "The Future of European Competitiveness." And the German Chancellor congratulates himself on having recently secured a commitment that competitiveness will henceforth always take top billing in the conclusions of EU summits.
Why does no one care? If "competitiveness" represents the desire for Europe’s economy to thrive again, there is certainly no lack of awareness regarding the problems.
Europe is falling behind because corporate productivity and innovation are too low and energy prices too high; because bureaucracy and regulations not only stifle the economies of member states but also hinder the Single Market.
During her first term, which ran until 2024, EU Commission President Ursula von der Leyen paid little heed to these issues, focusing instead on driving forward the "Green Deal." However, the severe structural crisis—particularly within European industry—has forced her to change course over the past year and a half.
Yet, adopting the promotion of competitiveness as a new goal changes nothing in substance—if only because the concept is not new to the EU; it has been around for over a quarter of a century. Above all, the term serves to reconcile—and thereby quickly neutralize—divergent views on economic policy.
One interpretation, rooted in market principles, holds that competitive companies are simply those that succeed in the marketplace.
The other, state-interventionist view holds that companies require "government doping" to become competitive—whether through state funding or protectionist measures.
This conceptual vagueness—which facilitates compromise-laden rhetoric while resulting in little actual political impact—dates back to the Lisbon Strategy of 2000, the goal of which was to make Europe the "most competitive and dynamic knowledge-based economy in the world." While those unfulfilled catchphrases may be forgotten today, they are nonetheless making a spirited comeback in the Draghi report and countless EU documents.
Beyond its appeal as a political compromise formula, "competitiveness" remains strangely devoid of substance. Who or what is supposed to become—or remain—competitive? The EU? Its member states? "The" economy? Individual companies? Who, in each case, are the competitors? By what means can the EU influence its own competitiveness or that of its economy? Precisely because these questions are difficult to answer, the goal is all the easier to bandy about.
Von der Leyen intends to continue pursuing this through traditional industrial policy—as evidenced, for instance, by her recent proposal for "Made in EU" requirements. Market-based instruments are alien to the Commission President, and she shows little interest in deepening the Single Market beyond catchy slogans like "One Europe, One Market." Moreover, it is doubtful whether the thicket of regulation and bureaucracy emanating from Brussels can simply be cleared away by the "omnibus initiatives" the Commission is rolling out at such a rapid pace. While consolidating or scrapping existing rules may be the right move, the underlying regulatory culture—and the officials who embody it—will not simply vanish as a result.
This applies just as much, however, to the member states. Senseless national rules acting as non-tariff barriers to trade are estimated to cause prosperity losses amounting to €1.1 trillion—just under 10 percent of the EU’s economic output. When the German Chancellor (like many others) grumbles about "Brussels bureaucracy," he is welcome to start dismantling barriers right here at home. It is not merely a matter of cutting red tape, but also of putting an end to parochialism—such as in the handling of the supposedly 'hostile' takeover of Commerzbank by UniCredit.
At least EU heads of state and government endorsed a long list of concrete—mostly rather granular—steps to deepen the single market just under two weeks ago, ranging from 'EU Inc.' to the 'European Business Wallet.' This agenda is slated for completion by the end of the year. Progress in this area is necessarily incremental; hence, these steps are the right approach and worth more than a hundred declarations of commitment to competitiveness. Of course, nothing is truly gained until the measures are actually implemented.” [1]
1. Wettbewerbsfähigkeit bleibt eine hohle Phrase. Frankfurter Allgemeine Zeitung; Frankfurt. 01 Apr 2026: 15. Von Werner Mussler, Brüssel