Public investment has recovered in the European Union to levels seen before the financial crisis, helped in part by recovery funds. Still, the Twenty-Seven will need roughly 650,000 million euros annually to finance ecological and digital transitions. They require a larger, more strategic public investment effort with instruments that are more innovative, aimed at reducing private sector risk and preserving Europe’s competitive edge in key sectors. This is among the many conclusions of the EU’s latest report on competitiveness and the single market, which also recommends modernizing trade agreements and alliances and deploying an improved arsenal of defense instruments for trade. The emphasis is on strengthening Europe’s ability to compete globally while keeping the market open and fair for businesses. In this context, the report highlights the need for governments to simplify rules, accelerate the deployment of decarbonized energy, and boost cross-border infrastructure, including networks and interconnections across borders, to support a robust European market. The Commission argues that ensuring the market remains a strong asset for the EU is essential, though it is not a static achievement. Economic health and competitiveness depend on ongoing efforts to align policy with the evolving economic reality. This includes practical steps to streamline rules and bring faster, smarter investments into energy, transport, and digital infrastructures that interlink member states and boost resilience.
To keep the European market, which accounts for a substantial share of global exports, among the world’s major commercial powers and to enable companies to thrive, the European executive argues for selective use of defensive trade tools when appropriate. It also advocates for fair and open trade practices. The report notes that the Covid-19 pandemic and Russia’s invasion of Ukraine exposed vulnerabilities in the single market’s supply chains. It calls for bold actions such as reciprocity measures, joint purchasing, and diversified sourcing to bolster resilience.
Joint Purchases
The Commission points to the gas joint purchasing platform as a model for organizing the procurement of other strategic essentials, including hydrogen and critical raw materials. The greater exposure to producers like China in recent decades has expanded the set of tools used by many countries. The report also argues for continuing the expansion of the capital markets, improving access to private finance, and especially to venture capital, which remains insufficient. It stresses the importance of addressing labor market gaps and reducing over-regulation and bureaucratic obstacles to unleash broader investment.
The report confirms Europe’s many competitive strengths and reiterates that a strong single market remains fundamental for companies to prosper and seize new opportunities. Yet more efforts are needed to spur investment, advance strategic technologies, and ensure the workforce has the right skills, according to Margrethe Vestager, the executive vice president, in a recent statement. This assessment underscores the ongoing challenge of keeping Europe ahead in a rapidly shifting global economy.