Europe must prioritise competitiveness and integration to stay ahead

Competition policies
Competitiveness

The EU needs a sharper focus on competition policy to strengthen its global competitiveness, boost productivity and ensure the single market remains a pillar of economic strength, according to the EESC.

At its January plenary, the European Economic and Social Committee (EESC) adopted the opinion A Competition Policy at the Heart of EU’s Competitiveness. The opinion calls for a deeper integration of national economies and smarter State Aid strategies to unlock Europe’s economic potential and address key global challenges, including digitalisation, climate change and resilience.

Competition policy: A strategic tool for growth

The EESC highlighted the fact that competition policy is critical for fostering innovation, sustainability and economic growth. ‘There is no conflict between competition and competitiveness,’ said rapporteur Isabel Yglesias. ‘With streamlined procedures, flexible tools and sufficient resources, competition policy can drive prosperity for EU businesses and citizens.’

The EU’s new competition rules, such as the Digital Markets Act (DMA) and the Foreign Subsidies Regulation (FSR), are already addressing market distortions and enhancing the bloc’s global standing. However, the EESC calls for further measures to modernise merger assessments and ensure innovation-driven mergers are effectively controlled, even if they fall below current EU thresholds.

Coordinating State aid for maximum impact

The opinion highlights the vital role of State aid in supporting the green and digital transitions. However, poorly coordinated subsidies risk undermining productivity and growth. Studies show that better coordination within the EU could boost productivity by over 30%. The EESC recommends aligning subsidies across Member States to enhance European value chains and prevent inefficiencies.

The important projects of common European interest (IPCEIs) and the proposed European Competitiveness Fund should be designed with a pan-European perspective to drive large-scale industrial innovation. These tools must ensure benefits are distributed fairly across the Union, promoting sustainability and resilience.

The path forward

To position the EU as a global leader, the EESC emphasises the need for:

  • greater integration to reduce misallocated subsidies and boost productivity;
  • stronger rules to protect European innovation during foreign acquisitions;
  • simplified and faster competition and State aid procedures to increase efficiency; and
  • a balanced merger policy that promotes innovation, sustainability and infrastructure investment.

The EESC welcomes the proposal for a European Competitiveness Fund, describing it as a step in the right direction. The fund should focus on strengthening European value chains and be managed at EU level for maximum efficiency and fairness.

A united effort for global leadership

As Europe grapples with complex global challenges, the EESC stresses that competition policy must remain central to ensuring the EU’s global economic leadership. By deepening market integration and fostering innovation, Europe can maintain its competitive edge while increasing sustainability and resilience.

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