Alongside Traditional European Giants, Europeans Choose Asia and the USA

At this year’s Brussels Economic Forum, one of the most important economic events of the European Commission, European politicians and industry leaders sent a clear message: Europe needs to redefine its industrial strategy if it wants to remain globally relevant. The focus was on issues of competitiveness, technological sovereignty, market fragmentation, and the increasingly frequent geopolitical turbulence that requires faster responses.

Reforms and Investments Key to Resilience

In his opening address, European Commission Vice-President and Commissioner for Economy Valdis Dombrovskis emphasized the importance of maintaining fiscal discipline, as well as continuing investments that will enable the European economy to remain competitive.

– Europe must act decisively at all levels, national and European. On one hand, fiscal responsibility is needed, and on the other, strategic investment in energy transition, defense, and digitalization – said Dombrovskis.

He reminded of the ‘RePowerEU’ initiative and new investment instruments worth more than €800 billion, but emphasized that ‘the funds alone are not enough if we do not know how to use them quickly and efficiently’.

Luca de Meo: Europe Acts Slowly, Fragmented and Without a Clear Demand Shock

One of the sharpest and most concrete speakers was Luca de Meo, CEO of Renault Group. He warned that Europe is the only major region in the world that has not returned to pre-pandemic demand levels, especially in the automotive industry.

– The first thing Europe needs to do is stimulate demand. Right now, everyone is talking about supply, about subsidies, about green technologies, but no one is talking about how to motivate citizens to spend again. People are holding savings in banks instead of buying new cars – that is the problem – claims the head of Renault.

De Meo believes that Europe is lagging not because it lacks ideas or innovations, but because the system does not function quickly enough. He also warned about the fragmentation of the European market, which he sees as one of the key obstacles.

– When we look globally, it is clear that innovations are happening at a great speed – in China, India, the USA. Europe, in comparison to these markets, looks tired. We need a ‘management system’ that knows how to make decisions and implement them quickly. In a world where scale is sought, Europe appears divided. We have a pile of regulations, national rules, and local initiatives that slow us all down. We need to find standards that will allow for the rapid scaling of technologies and products – he added.

De Meo called for a more open dialogue with the public sector and the scientific community to develop real strategies that will not only enable competitiveness but also stimulate innovation.

Electrolux CEO: Europe is Under Cost Pressure, Asia Maintains Advantage

A similar message was sent by Yannick Fierling, President and CEO of Electrolux, who explained through his own example how European manufacturers today face numerous disadvantages – from high energy costs to increasing regulatory pressure. He also emphasized that it is currently essential to revive demand, but also to redefine the regulatory framework that increasingly stifles the industry.

– Europe has gone through COVID, inflation, and an energy shock. At the same time, Asia has not experienced the same disruptions in production costs. This gives them a huge advantage in the global market. We need to reduce complexity and the number of regulations. Every new regulation becomes an additional cost, an additional challenge. Instead of protecting European manufacturers, they are actually slowing us down – says Fierling.

He emphasized that European industrial companies, although often over a century old, certainly know their customers and markets, but must change to maintain global competitiveness.

– We need to adapt faster and more effectively. We will not succeed if we are constantly dealing with regulation instead of innovation – added Fierling.

What Game Should Be Played?

Arancha González, Dean of the Paris School of International Relations Sciences Po, emphasized the need for strategic positioning of Europe between great powers.

– Markets are influenced by greater state intervention. Now it is new that the USA has decided to ‘leave the order’. It will be how the 87 percent of others that make up the world market will react to this, and whether this new order will change. The order has logic; it is not illogical. And we see that it costs a lot. Changing the system depends on how the markets will react, and there is not much change visible from the markets – believes González.

She also added that Europe should choose Europe and ‘play its game’, and that game is an internal, unified market. She also believes that good relations with the USA are very important, but without bowing to economic uncertainty and aggression. Of course, there are also other great powers and opportunities waiting.

– We must have a functional relationship with China. When you think about them, they make up 15% of the global economy and play a key role in the financial stability of the world. We should also build bridges with others. There are many who desperately want to build bridges with Europe – said González.

G-2 Era?

The global order is changing, and Europe must realize that it can no longer rely on multilateralism as we know it, warned Arvind Subramanian, a senior fellow at the American Peterson Institute and former economic advisor to the Indian government.

– Today we are in a G-2 world – a world dominated by the USA and China. One should not be deceived by the idea of multipolarity – it is an illusion. Europe must find a way to become a real, not just a nominal partner in this dynamic – he said.

Subramanian believes that Europe could have a greater role if it strengthens its internal political center, boosts its domestic economy, and finds ways to genuinely connect with markets like India.

– But do not enter into those relationships presenting yourself as a morally superior partner. No one likes that. Be pragmatic, be competitive, and be open – added Subramanian.

Technological Sovereignty Without Closing Doors

The issue of technological independence was also in focus at the conference, and Henna Virkkunen from the European Commission emphasized that reducing dependence on other continents is crucial for security, but it must not lead to isolation.

– We do not want to be dependent on one country – whether China or the USA. But that does not mean we are closing ourselves off. We want to develop our own capacities while simultaneously building partnerships with reliable countries like Japan, India, Canada, or South Korea – she stated.

Virkkunen also believes that Europe has potential, but has not yet fully utilized its advantages, especially when it comes to the opportunities presented by the development of artificial intelligence, in which Europe still cannot compete with the rest of the world.

– We have startups, but we do not have scale-ups. We have knowledge, but we still do not have a proper single market. That needs to change – she concluded.