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What’s happening? EU leaders gathered at Alden Biesen Castle in Belgium on 12 February for an informal retreat on competitiveness. Emmanuel Macron demanded concrete reforms by June, warning that France could move ahead with a smaller coalition of willing states if consensus among all 27 members fails. Mario Draghi pitched his “pragmatic federalism” blueprint, while Friedrich Merz and Giorgia Meloni rallied 19 countries behind deregulation and industrial policy.
No decisions were taken, but three ideas are headed for March’s European Council: an EU-wide company law regime, cheaper energy for industry, and “Made in Europe” procurement rules. The talks exposed deep divisions over debt sharing, protectionism, and how aggressively Brussels should defend European firms from the US and China.
There was a castle, a former central banker, and 27 leaders standing under umbrellas in the Belgian rain — a scene that perfectly captured modern Europe: grand setting, cautious progress.
The informal retreat at Alden Biesen had all the familiar choreography. But this time the anxiety felt real.
The pressures are no longer theoretical.
American tariffs are already biting.
Chinese state subsidies are accelerating.
European growth continues to trail both rivals.
Even António Costa, who chaired the meeting, called the moment an “urgent strategic imperative.” Leaders broadly agree the continent is losing ground. They simply can’t agree on how to fix it.
The Macron Ultimatum
The bluntest message came from Paris.
Macron demanded “very concrete decisions by June” — and made clear that patience is running out. If all 27 member states can’t move together, France is prepared to use enhanced cooperation, allowing a smaller group to integrate faster without unanimity.
It’s a deliberate escalation.
Macron wants permanent EU-level borrowing — potentially as much as €1.2 trillion a year through joint Eurobonds — to fund green tech, digital infrastructure and defence. Berlin, however, remains unmoved. Merz ruled out shared debt entirely, reiterating Germany’s long-standing fiscal red lines.
The familiar Franco-German fault line is widening.
Macron, weakened at home by low approval ratings and a fragile parliamentary position, is pushing for big, federal solutions. Merz, heading into elections, is leaning toward deregulation and industrial pragmatism — closer to Rome than Paris.
A Summit Before the Summit
The shifting alliances were visible even before the meeting began.
Meloni and Merz quietly convened 19 leaders — along with Ursula von der Leyen — for a pre-summit strategy session. Bart De Wever co-hosted. Spain, Portugal and several Baltic states stayed out.
Their message: less regulation, more trade, fewer protectionist instincts.
The group emphasised industrial competitiveness, looser climate rules and faster trade diversification — including reviving the long-stalled EU-Mercosur agreement that France continues to resist.
As Roberta Metsola put it succinctly: competitiveness needs capital.
Europe’s fragmented capital markets remain one of its biggest structural handicaps.
Draghi’s Blueprint Returns
Draghi, whose landmark competitiveness report last year laid out Europe’s widening gap with the US, returned with an updated plan he calls “pragmatic federalism.”
The logic is simple: act at European scale or fall behind.
His proposal — roughly €800 billion a year in coordinated investment — has shaped the debate but stalled politically. Still, Draghi urged leaders to stop studying the problem and start executing. If unanimity fails, he suggested, move ahead with coalitions of the willing.
On that point, he and Macron are aligned.
What’s Actually on the Table
Despite the rhetoric, only three concrete measures advanced.
1. A “28th regime” for companies
An EU-wide legal framework allowing firms to operate under one set of rules instead of navigating 27 national systems. If adopted, it could become the biggest simplification of business law since the Single Market’s creation.
2. Cheaper energy
The Commission will propose steps to cut industrial power costs, addressing a glaring disadvantage versus US manufacturers benefiting from cheaper gas and electricity.
3. “Made in Europe” procurement
Public contracts would prioritise products with European content. But definitions are contentious: France wants strict EU-only sourcing; Germany prefers including “trusted partners” such as the US and UK.
The Credibility Problem
The uncomfortable truth: leaders have spent years discussing competitiveness with limited follow-through.
Reports pile up. Implementation lags.
Meanwhile, the private sector isn’t waiting. European firms are sitting on roughly €2.6 trillion in cash. Banking mergers are accelerating. Capital is moving — with or without Brussels.
The question is whether policymakers can match that urgency.
If not, Macron’s June deadline may simply deliver another communique — and little else.
And this time, he’s made clear he may not wait.
