Europe’s Roadmap to Competitiveness and Security Needs a Reality Check
Witold Strzelecki, Managing Director, Business & Science Poland
The European Commission’s Clean Industrial Deal offers Europe a unique opportunity to reverse its decline in economic competitiveness relative to other global players. To achieve this goal, also in line with the Polish Presidency of the Council of the EU’s focus on economic security, the proposed measures must address the real needs of a transforming economy. Equally important, the Deal’s success depends on actively involving those who are directly affected by the proposals, including the business community. Taking place on 19 March under the patronage of the Polish EU Presidency, the Competitiveness & Security Business Summit will serve as a timely platform to discuss both the challenges and the opportunities for European business considering the Commission’s newly proposed approach to EU competitiveness.
The decline in the European economy’s competitiveness did not suddenly begin after the last European election or the formation of the new European Commission, nor was it solely triggered by Russia’s invasion of Ukraine or the COVID-19 pandemic. Instead, it has been a long-term process that has only recently risen to the top of everyone’s agenda, overshadowing the previous five-year focus on climate neutrality. Despite repeated efforts - through policy work, various reports and discussions on how to accelerate EU growth - little tangible progress has been made. It would be trivial to argue that only now must the European Union take decisive action to address this challenge. Instead, a more pressing question should be explored: how can we ensure that this time we deliver on this objective and avoid finding ourselves back at square one in a few years?
Identifying the Real Problem
The Clean Industrial Deal is the most anticipated policy document of early 2025, marking a new chapter in Europe’s economic revival. As highlighted in the European Commission’s Competitiveness Compass communication, during the last two decades “Europe has not kept pace with other major economies, due to a persistent gap in productivity growth”. Multiple factors explain why we lag behind the United States and China – ranging from an innovation gap and unfair global competition to insufficient financing, high energy prices, and heavy regulatory burdens. Meanwhile, evolving geopolitical tensions only make these challenges more urgent.
The EU must address these issues both urgently and thoughtfully. We have run out of time and can no longer afford measures that lead nowhere. Otherwise, we risk becoming an irrelevant relic on the global stage. The Clean Industrial Deal can guide the European Union toward a decarbonized economy that goes hand-in-hand with robust competitiveness, provided it addresses the real needs of a transitioning economy.
Realistic and Equitable Action Plan
The first step towards achieving this ambitious goal is ensuring access to affordable and reliable energy. This can be accomplished through ensuring technology neutrality and strongly supporting local energy generation – using a maximum range of zero- and low-carbon technologies. For instance, despite its potential to offer stable, cost-effective, decarbonised energy - even for hard-to-abate sectors - nuclear energy has long been overlooked by the EU. Energy sovereignty and security are critical not only for the growth of traditional industries but also for fostering innovation and expanding the clean-tech sector. The next priority is strengthening supply chains. This entails providing financial support, expanding domestic industrial bases, and increasing the involvement of local companies in EU supply chains - especially in sectors essential to decarbonization. These measures will help create thousands of highly specialized jobs. Additionally, the innovation gap that has rendered European products uncompetitive at home and abroad must be addressed. Finally, the plan should support high-carbon regions and energy-intensive sectors, given their importance to the European economy.
Better Regulation, Better Implementation and Simplification
EU regulations must be tailored to the specific conditions of each Member State. When designing and implementing policies, it is essential to consider geopolitical, economic, and technological factors, as well as social costs. New policies and laws should be evidence-based and capable of achieving their objectives efficiently - particularly in areas such as investment processes, regulatory requirements, innovation, and financing. Experience has shown that complex administrative procedures and regulatory barriers slow down investment processes, ultimately undermining the competitiveness of European businesses. Another crucial aspect is ensuring investment predictability. To address this, the Clean Industrial Deal should support industry by creating stable market conditions and simplifying procedures, thereby fostering a more conducive environment for growth and innovation.
Open Dialogue with Industry
No one is better positioned to evaluate policies than the stakeholders who are directly affected by them. In light of dynamic geopolitical shifts and mounting challenges, open dialogue between EU institutions and business is vital for safeguarding Europe’s long-term competitiveness and economic security. Such dialogue can take the form of bilateral meetings as well as broader discussions. The latter will be exemplified by the Competitiveness & Security Business Summit, organized by Business & Science Poland and held on 19 March at Rue Belliard 40 in Brussels under the patronage of the Polish Presidency of the Council of the EU. The summit will serve as a timely platform for examining the challenges and opportunities facing European businesses. The event will focus on five key dimensions: innovation, industry, financing, strategic value chains, and defence.
European competitiveness and security challenges are neither new nor short-term, yet the shifting geopolitical and economic landscape has made them more pressing than ever. The EU can’t allow another ambitious strategy to fade into obscurity. Building a decarbonized, competitive European economy requires affordable, locally sourced energy, resilient supply chains, smart regulation and financing for innovation, and ongoing dialogue with businesses. Only through a comprehensive and proactive approach can Europe avoid revisiting the same unresolved challenges in the future.
The Competitiveness & Security Business Summit will be organised in strategic partnership with ORLEN S.A., Polska Grupa Zbrojeniowa S.A., KGHM Polska Miedź S.A., Bank Gospodarstwa Krajowego, Digital Poland Association, and Allegro.
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