🔴 The European Commission's New Competitiveness Roadmap

A research note, translated for our paying subscribers

Dear members,

The European Union's new competitiveness roadmap, presented by Commission President Ursula von der Leyen, marks a major turning point for the European economy. Conceived as a "competitiveness compass," it draws on the recommendations of the Draghi report, a key document commissioned to identify the structural weaknesses of the European economy and propose ways to stimulate growth and innovation.

Mario Draghi, former president of the European Central Bank and former Italian prime minister, stressed in his report that Europe suffers from industrial stagnation, a shortage of innovative startups and a decline in its attractiveness compared with the United States and China. He insisted on the need for a more dynamic framework, easier access to financing and stronger support for strategic sectors.

Against a backdrop of rising protectionism in the United States, especially under the Trump administration, and growing pressure from China on global supply chains, Europe must reinvent itself to stay competitive. Von der Leyen's roadmap tries to meet that challenge by betting on three fundamental pillars: innovation, decarbonization and economic security.

This note analyzes the main measures of the strategy, identifies its major strategic risks and examines its potential geopolitical consequences.

Executive summary

The Commission's roadmap aims to stimulate innovation, modernize industry and strengthen the strategic autonomy of the EU. Among the main initiatives:

• A single "28th regime" legal framework for innovative companies, harmonizing the rules on taxation, corporate law and insolvency.
• A capital markets union to stimulate risk investment and smooth cross-border financial flows.
• A strategic plan for artificial intelligence (AI), quantum computing, biotechnology and space technologies, with the creation of "AI factories" to test and develop these technologies.
• A "Clean Industry Pact" to decarbonize industry without sacrificing competitiveness, with targeted subsidies for the 100 largest CO₂ emitters.
• A European strategic autonomy initiative aimed at securing critical supply chains and introducing a European preference in public procurement.
• A massive reduction in administrative burdens, with potential savings of €37 billion a year for companies.

While this roadmap represents a pro-business turn in EU policy, it also carries major strategic risks, particularly in terms of