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Commission President has recently underlined main facets determining modern European competitiveness at the “business summit-2026” in France. The following challenges have been underlined and reviewed: the competition’s rules and conditions, financing the EU’s concept of “social market economy”, the concerns of the Union’s single market, energy issues, artificial intelligence and external trade. The President’s message is crystal-clear: only by collective efforts by the states and citizens, the EU can withstand modern challenges.
Background
For several decades, the European integration and economic model was based on a few clear assumptions: cheap imported energy, open global trade, growing access to the Chinese market, as well as the American strategic protection and Western technological progress.
Howevr, almost all of these “preferences” have disappeared presently: besides, it has become more expensive, notes the President, to “turn the advantages into investments, production and growth”. The EU’s corporate community is facing several shocks/ challenges at the same time: higher energy prices, fragmentation of the single market, certain complex regulations, and competition that is not always fair. That is why, in the short term, the EU “needs to give back space to invest”, and in the longer term, “to make innovation, productivity and scaling-up the sustainable drivers of European growth”. The EU has potentials: e.g. a market of about 450 million consumers, world-class businesses, highly skilled workforce, a research sector (that accounts for 20 percent of global expenditure on R&D), as well as high level of savings. Recently, some other growth facets have stabilised: such as the EU-wide rule of law, predictability, strong democracies, and numerous “freedoms” – in research and innovation, pursuit and contest…
General reference and citations from: the speech by Commission President von der Leyen at the annual conference “La Rencontre des Entrepreneurs de France 2026”, in: https://ec.europa.eu/commission/presscorner/detail/en/speech_26_1765
= First challenge deals with the competition’s rules and conditions. The EU authorities have to simplify and restore fair conditions for competition: hence, the task is to reduce the administrative burden by 25 percent for all companies and by 35 percent for SMEs by 2029. There are already approved 12 Omnibus packages, which account for around €17 billion in annual savings; six packages have already in forced – they are worth €6 billion in savings – and other omnibuses will follow shortly.
More on simplification in: a) https://www.integrin.dk/2026/01/22/simplification-process-eu-omnibus-packages-on-the-run/; and b) https://www.integrin.dk/2026/05/10/the-ideas-of-simplification-and-omnibus-challenging-facilities/
The Commission intends to “review the whole body of EU law”: i.e. removing duplication, reducing reporting obligations, speeding up permitting and designing simpler rules – both at the EU and the member states’ levels. However, the “need for regulatory simplicity” must go hand in hand with a need for fairness on the part of foreign competitors: the latter is particularly vital in the EU-China relations; as soon as China is the EU’s major economic partner, the Union’s approach is “clear and consistent”: derisking without breaking ties. The President notes that “being a partner does not mean accepting permanent imbalances”: i.e. some Chinese companies receive as much as eight times more in subsidies than comparable firms in the OECD states. In 2024, the global value chains remained a central feature of the world economy. Trade linked to these networks accounted for around 17 percent of global GDP, while total global trade reached about 31 percent of global GDP.
More in: https://www.oecd.org/en/blogs/2026/07/global-value-chains-why-international-production-is-evolving-not-fragmenting.html?adestraproject=What%27s%20New%20at%20OECD
Chinese imports into the EU have increased by 45 percent in five years, while the EU’s exports to China are falling and the EU-trade deficit with China has now reached nearly a billion euro a day (in the beginning of 2026, it increased by ten percent. Besides, in 2026 – for the first time – all EU member states have had trade deficit with China. Some estimates suggest that more than half of European industry is now facing competition from China. And it is not just a question of price, adds the President, China controls key links in the EU-wide supply chains. Hence, the EU has become more than 80 percent dependent on China for many critical raw materials, and almost totally for some rare earths. Besides, it is evident, says President, that this dependence can be used as leverage against the EU, and “we must therefore ensure that fair conditions are respected”, and the dialogue with China remains necessary. But when dialogue is not enough, “we must be ready to make full use of our instruments: last year alone, the EU opened more than 30 new trade defence investigations, which is almost three times more than the historical average”. These measures have already protected more than 600 000 European jobs. as the general idea, notes the President, is defending “the resources of economic security”, which depend on: critical raw materials, batteries, semiconductors, cloud computing, data and sensitive technologies. Although the EU’s market remains open, it requires security, fairness and reciprocity.
= Second challenge is about financing the EU’s concept of “social market economy”. In the EU-27, there is no shortage of technology or savings, though it lacks the ability to scale up businesses: e.g. too many projects stall because the initial investment is too risky, because demand is too uncertain or because capital is too expensive.
The companies in the member states know how to get started, but they also need to be able to grow; too often they go elsewhere for the funding, change the place of work, or they get bought out. The EU’s specifics is enormous private savings that are not effectively used: presently, about ten trillion euros in household savings are kept in bank accounts. And a large share of European savings is invested outside the EU; so, Europe needs to put these savings to work for its companies. This is the goal of the EU’s “savings and investment union”.
More on SIU in: https://www.integrin.dk/2025/11/06/eus-savings-investment-union-boosting-banks-and-insurers-equity-investments/
The Commission has drafted proposals on securitisation, on bank and insurance investments, as well as on the markets’ integration and supervision: these measures could unlock up to €470 billion in additional investment. The EU budget also plays a vital role: with over €450 billion from the European Competitiveness Fund and the Horizon Europe program, the EU will support the entire chain: from research to innovation, from laboratories to business, and from initial prototypes to industrial production.
= Third challenge concerns the EU’s single market, as the Union’s greatest economic asset. However, notes the President, the single market is incomplete for services, energy, ICTs, finance and the digital economy: internal barriers can have the same impact as tariffs as high as 45 percent on goods and 110 percent on services. Such tariff levels would be completely unacceptable from an external trading partner, but, the President notes, “we still accept them among ourselves in Europe”. One of the ways-out is the EUs’ specific project, called “the 28th regime” and/or the “EU Inc”: presently, the European entrepreneurs must contend with 27 legal systems and more than 60 types/forms of companies. Hence, under the “EU Inc.”, a business could be set up in 48 hours, for less than €100 and entirely online, with no minimum capital requirement, and under a single framework valid throughout the EU-27.
The EU’s internal competition policy also needs to scale up, notes the President: for the first time in over 20 years, the Commission has conducted an in-depth review of rules on mergers and acquisitions, with the purpose of a better account on investment, innovation, resilience, global competition, to enable the EU companies to grow and become global leaders. But scaling up requires more than just tailored rules; the companies also need markets and predictability. The goal is reached by the new Industrial Accelerator Act aimed at European preferences, faster permitting for industrial projects, lead markets for steel, cement, aluminium, vehicles, batteries and clean technologies, as well as more strategic use of public procurement and the state aid. And, as the EU invests more, it has to produces more at home: when public funds are committed, they must serve the EU-wide priorities: low-carbon production, the resilience of value chains and the European industry. Finally, the single market must also become a genuine skills market, notes the President: nearly two in every three SMEs have said they cannot find the skills they need. Hence, the EU must invest more in training and retraining, in improving the recognition of qualifications and in facilitating a balanced and fair labour mobility. By the end of 2026, the Commission intends to present a package on fair labour mobility in order to strengthen the European Labour Authority, to propose a European Social Security Pass and make it easier to recognise skills and qualifications throughout the EU-27.
More on the single market in financial sector: https://www.integrin.dk/2026/08/10/european-single-market-for-banking-expected-measures-through-digitalisation
= Fourth challenge is energy, which is, as the President notes, “the main factor limiting European competitiveness and independence”. Prices in Europe are still twice or three times higher than in the US or China; more than half of the energy sources still come from imported fossil fuels. This dependence is costly for the EU economy: since the start of the crisis in the Middle East this dependence has already costed additionally over €50 billion more. The plans are to produce EU’s own low-carbon energy in Europe: already presently, due to renewable energy and nuclear energy, more than 70% of regional electricity is produced from low-carbon sources. But electricity accounts for just a quarter of the EU-wide final energy consumption; hence, the strategy is to speed up the electrification of industry, transport and construction, hence, the strategy’s main points are included in the recently adopted European Electrification Action Plan. At the same time, the process of “electrifying states’ economy” means reducing imports of fossil fuels and strengthening energy’s independence.
However, switching the corporate sector to the |home-made electricity” is impossible, as it is on average nearly three times more expensive than gas; thus, the EU “must bring down all components of electricity bills”, notes the President: i.e. first of all, through more long-term contracts, protecting businesses against volatility, as well as guaranteeing them stable prices in the long term. Second, it is important to develop the energy grids: e.g. in 2025, the EU installed more than 80 gigawatts of renewable capacity; but six times more capacity is still waiting to be connected. At the same time, about 10 terawatt-hours of renewable electricity have been lost due to insufficient grid or storage capacity, which is equivalent to the annual consumption of three million households. So, notes the President, it is vital to invest faster, speed up grid connections, develop storage and make better use of existing infrastructure. Fourth, the taxation aspects in the energy policies: as soon as the electricity should not be taxed more than gas, the energy’s price (as well as its predictability) for the industrially-productive sectors is becoming extremely important. The EU has proposed some measures for modernising the European carbon market: the objective remains the same – net zero by 2050. But the Commission gives the means to achieve this: e.g. by proposing to maintain free allowances after 2030 for businesses in the member states which invest in decarbonisation; by reducing their bills by almost €10 billion by 2030. Another stimulus is acceleration: starting in 2027, a new Investment Accelerator Plan will be able to mobilise €30 billion for projects that are ready to start. And the Industrial Decarbonisation Bank will enable more than €100 billion to be deployed by 2030. The EU’s approach includes: – predictable carbon signal; – better protection against carbon leakage; – more support for those who invest; and – facilitating the process of industry’s transformation.
= The fifth challenge is artificial intelligence. The AI’s market has become an economic and technological battlefield: at the same time, it is one of the most powerful productivity levers. Hence the President has summed-up the EU’s strategy “in words: produce and deploy”; and of course, produce is first. The EU must control the main digital elements: computing power, semi-conductors, cloud computing, data, energy and state-of-the art models. Thus, the Commission is mobilising €20 billion for artificial intelligence gigafactories; even the first EU-wide call resulted in 77 proposals from 16 member states, across 60 sites; and the second call was launched this summer. Through the Cloud and AI Development Act and the Chips Act 2.0, the Commission intends to strengthen the whole digital value-chain – from components to models. The EU must not depend on other powers for the digital technologies that will be required for the European economic growth, gigafactories, infrastructures and services. But computing power is not enough, added the President, it must be converted into productivity: therefore, the AI models shall be deployed within the member states’ economies, factories and research laboratories, hospitals and energy networks, transport and public services. Corporate sectors in the states, the President underlined, “are already adopting AI at a similar pace to their American competitors”; and other sectors “need to scale up”. As soon as Europe has industries, researchers and data, the next steps is turning these advantages into socio-economic progress.
= The sixth challenge is external trade. It is evident, that in the present fragmented world, openness is becoming a “source of power”: e.g. the EU external trade agreements are opening up markets for businesses, they diversify the supply chains, secure the needed raw materials and components; and they provide alternatives when certain partners become less predictable. The President underlined the following main aspect in economic security – avoiding dependence on one player; but an independent Europe that can choose its partners: e.g. the EU has concluded the CETA-agreement with Canada; since 2017, French exports of goods to Canada have increased by 45%, while French exports of services have more than doubled. Such external trade agreements deliver more opportunities for businesses, stronger value chains and more freedom of action for Europe.
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