For years, Brussels treated competitiveness as a matter of regulation, innovation and the single market. In 2026, that looks incomplete. The EU is now operating in a harsher environment where trade disputes, technological rivalry and supply-chain vulnerability are no longer side issues but central features of economic policy.
The pressure is coming from both sides of the Atlantic and beyond. Trade tensions with the United States over digital rules, tariffs and industrial subsidies are forcing Europe to defend its regulatory model while trying not to ignite a wider economic conflict. At the same time, the bloc is still wrestling with how to reduce dependence on China in critical sectors without crippling its own manufacturing base.
That is why the EU is increasingly using the language of strategic autonomy. Investment screening, state aid, critical raw materials, defence-related lending and industrial policy are all being pulled into one larger argument: Europe cannot remain prosperous if it cannot protect the assets that make prosperity possible. The danger is that the cure becomes part of the disease, as every sector starts to look “strategic” and every government starts protecting its own champions.
The euro area adds another layer of risk. Growth remains uneven, public finances are tight and the long shadow of high debt still limits how much fiscal firepower governments can deploy. Europe can talk about industrial revival all it wants, but without faster capital markets, deeper integration and more coordinated investment, the continent will remain a collection of national economies facing global competitors with one hand tied behind its back.
The choice is stark. Europe can either build a more resilient economic model that accepts a less innocent world, or it can keep pretending that openness alone is enough. The second option is easier. It is also the one most likely to leave the EU exposed.
