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The European Union’s struggle to maintain its status as a global economic powerhouse has taken center stage at an informal summit in Belgium, as leaders confront the stark reality of a fragmented single market and widening growth gaps with the United States and China. Against the backdrop of Alden Biesen Castle, the “27” are attempting to forge a unified “competitiveness roadmap” amid deep ideological divisions over fiscal policy and industrial protectionism.

Greek Prime Minister Kyriakos Mitsotakis arrived at the summit with a pragmatic mandate: stripping away the “abstract” nature of competitiveness to focus on tangible outcomes for the private sector. Mitsotakis argued that without reducing the stifling European bureaucracy and integrating the dysfunctional energy market, the EU risks losing the social support necessary for broader structural reforms. “Competitiveness is an abstract concept if it is not combined with better jobs and lower prices,” Mitsotakis stated, emphasizing that energy price parity is essential for European businesses to remain viable on the global stage.

The urgency of the summit is underscored by data suggesting the EU is “sabotaging itself” through regulatory inertia. While the Single Market boasts 450 million consumers and 18% of global GDP, it remains a market “in name only.” Fragmentation in services and professional qualifications acts as a de facto tariff, estimated at 44% for goods and a staggering 110% for services moving across borders. This inefficiency has led to a situation where only 5% of public contracts are awarded to companies from other member states, despite construction representing 11% of the bloc’s GDP.

However, the path toward integration is hampered by a shifting political landscape. French President Emmanuel Macron, traditionally the architect of deeper European integration, finds himself increasingly sidelined by the emergence of a new “Merzoni” axis, an alliance between German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni. While Macron advocates for “European preference” in public procurement and the issuance of Eurobonds to fund defense and technology, the Berlin-Rome axis remains staunchly opposed to common debt and protectionism, fearing such moves would hamper export-driven growth.

Former European Central Bank President Mario Draghi has added his weight to the discourse, warning that the EU must “federalize” its approach to innovation and capital markets or face terminal decline. Draghi’s report suggests that deeper integration in digital technology and energy could boost member states’ GDP by up to 9% annually. A critical component of this transition involves a potential overhaul of competition rules. Currently, EU regulators often block domestic mergers to prevent local monopolies, a practice critics say prevents the formation of “European giants” capable of competing with state-backed Chinese firms or American tech behemoths.

This internal friction reflects a broader global trend toward economic realignment. As explored in The Great Uncoupling: The Quiet Death of the Unipolar Financial Order, the traditional structures of global trade are being stress-tested by geopolitical shifts. For the EU, the challenge is not just internal efficiency, but survival in an era where geoeconomic independence is the new currency of power.

The European Commission has been tasked with drafting a finalized competitiveness roadmap by March 2025, with the goal of full single-market completion by 2028. For the business sector, the stakes are clear: the EU must decide whether to remain a collection of 27 fragmented markets or evolve into a singular, streamlined economic engine capable of financing its own innovation and defense.