Europe’s Competitiveness Push Gains Momentum Amid Sovereignty and Reform Challenges

Political Momentum Builds for European Competitiveness

European Union institutions are reportedly mobilizing behind a comprehensive strategy to restore the continent’s global economic standing, according to recent statements from senior officials. The push follows former European Central Bank President Mario Draghi’s landmark competitiveness report, which sources indicate urged coordinated action to prevent Europe from falling further behind China and the United States.

Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy of the European Commission, told Fortune that the Draghi report has “ignited a spark throughout the Commission” and created “a real change of mindset.” Analysts suggest this reflects growing recognition that Europe must address its competitiveness challenges through unified action.

Crisis-Driven Sovereignty Agenda

The EU’s renewed focus on competitiveness emerged from what officials describe as “two major economic shocks” that reshaped strategic thinking. The COVID-19 pandemic revealed vulnerabilities in supply chains and raw material dependencies, while Russia’s war in Ukraine exposed energy security risks that affected most European nations., according to industry news

“Except for a few countries like France, which had a nuclear mix, much of Europe was vulnerable because of our dependence on Russian gas, which suddenly stopped,” Séjourné explained. However, the report states that the EU has since moved rapidly to reduce gas dependence for electricity generation from over 50% to under 10% within two years.

Decarbonization as Competitive Strategy

European officials reportedly view climate transition not just as environmental necessity but as economic opportunity. The decarbonization strategy aims to modernize heavy industries while creating new jobs and investment, according to Commission statements.

“Our decarbonization strategy will help steelmakers, chemical plants and vapor-crackers that produce key molecules modernize their production systems to be more competitive worldwide,” Séjourné said. This reportedly involves developing infrastructure for low-carbon technologies like green hydrogen production and transport., according to industry reports

Regulatory Reform and the ’28th Regime’

Despite ambitions, analysts suggest Europe’s regulatory complexity remains a significant hurdle. Companies still face legal, fiscal and regulatory barriers when operating across the EU’s single market, despite its theoretical guarantee of four freedoms.

The European Commission’s proposed solution involves creating what it calls the ’28th Regime’ – a harmonized set of EU-wide rules that would allow innovative companies to operate under a single framework rather than navigating 27 distinct legal systems. Séjourné described this as “the most important project for Europe’s economy,” with the goal of providing “one legal representative, one accountant, one company status throughout Europe.”

Stability as Competitive Advantage

Even as it pursues reform, Europe maintains what officials characterize as a less obvious competitive edge: regulatory predictability. Unlike the United States, where policies can shift dramatically after elections, Europe’s slower but more stable approach provides investors with long-term certainty, according to the analysis.

“In Europe, we may move slower at first, but once the system is in place, it’s stable,” Séjourné noted. “Investors know what to expect five or 10 years ahead. Predictability and reliability are crucial.” This reliability, officials suggest, serves as Europe’s secret weapon against American speed and Chinese scale.

Execution Challenges Remain

While political will appears to be growing, sources indicate that consensus does not automatically translate to execution. The EU must still tackle policy simplification, accelerate innovation investment, and overcome the fundamental challenge of coordinating 27 member states.

European business leaders have echoed this urgency, with a recent meeting between the European Commission and 60 corporate leaders emphasizing that competitiveness now depends on execution speed rather than new rhetoric. The success of Europe’s ambitions reportedly hinges on what could be called ‘necessary integration’ – building the cross-border infrastructure and institutional trust required for decarbonization and economic renewal.

As the second Von der Leyen Commission advances its policy roadmap, the coming months will reportedly test whether Europe can transform political energy into concrete achievements that restore its competitive position globally.

References & Further Reading

This article draws from multiple authoritative sources. For more information, please consult:

• https://research-and-innovation.ec.europa.eu/news/all-research-and-innovation-news/commission-seeks-feedback-future-european-innovation-act-2025-07-09_en
• http://en.wikipedia.org/wiki/European_single_market
• http://en.wikipedia.org/wiki/Low-carbon_economy
• http://en.wikipedia.org/wiki/European_Union
• http://en.wikipedia.org/wiki/Europe
• http://en.wikipedia.org/wiki/Mario_Draghi

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