It was an informal ‘retreat’ in the rain, with no written conclusions, but which nevertheless enabled European leaders to agree more or less on the directions to be taken to boost the EU’s competitiveness.
The EU27 did agree on certain points, as the President of the European Council, António Costa, summed up at the end of the proceedings: “Today’s discussion brought a new energy and shared sense of urgency. We found the ways to agree on concrete actions at the March European Council”.
“There is unanimous agreement to continue to push ahead with our ambitious simplification agenda” and “we all agree on the importance of moving forward quickly this year with the 28th regime to make sure that our companies can operate (...) with a simple and single set of corporate rules”, he added.
“In some sectors like telecom, we should allow for a degree of company consolidation to achieve the necessary level of investment and innovation” and, on electricity prices, “the energy transition remains the best long-term strategy for Europe to achieve strategic autonomy and lower prices”.
In addition, there is “a broad, shared understanding of the strategic importance” for Europe of protecting and strengthening certain sectors, the President added, such as “defence, space, clean tech, quantum computing, artificial intelligence as well as payment systems”. There is also “unanimity that Europe is open for trade and that an ambitious and pragmatic trade policy, focused on diversification, is in our collective interest”.
A ‘new roadmap’ with very precise deadlines. For her part, the President of the Commission, Ursula von der Leyen, announced a ‘roadmap’, if possible negotiated with the European Parliament and the EU Council, on a series of initiatives to develop the Single Market.
Called ‘One Europe, One Market’, it will aim to make a quantum leap by the end of 2027 and will be presented in March.
This ‘One Market Pact’ will be based on five ‘building blocks’, including the reduction of administrative burdens. “We will do a deep house cleaning on the acquis”, Ms von der Leyen announced.
Closer cooperation on the 28th regime? “We agreed that we want to be done with phase one of the Savings and Investment Union, that includes the market integration, the supervision and the securitisation, by June. If there is not sufficient progress by then, we will consider introducing enhanced cooperation”, she also reiterated.
“Enhanced cooperation theoretically is also very interesting for the 28th regime because you can make it more ambitious, and if not all 27 immediately want to move on the 28th regime, we could go into the enhanced cooperation”.
The revision “of the guidelines on mergers and acquisitions, scheduled for April, should also promote European champions”.
“We can see very clearly what we have to do”, confirmed French President Emmanuel Macron: “The simplification to be implemented, because everyone agrees on this agenda; the deepening of the single market, meaning building a common market for telecommunications, capital and electricity. There is also consensus on the need for new guidelines on mergers and the 28th regime, which will simplify matters by allowing any company on the continent to opt for a regime valid everywhere”.
The French President said that he also sees agreement on an agenda to “reduce our dependence on defence, space, critical minerals and artificial intelligence”. Where Europe has dependencies, “it must agree to have European preferences”. “In March, we will define the sectors in which we are going to implement this European preference”.
German Chancellor Friedrich Merz also noted “a strong sense of urgency and a willingness to take a stand and act quickly. Three topics were discussed: the Single Market, bureaucracy and international trade. Broad support was expressed for this”. And “we will provisionally apply the Mercosur agreement. We have ratified it. It is important that this agreement comes into force quickly, and I am convinced that this will be the case”, added the German.
Bleak picture. The European leaders began the day with a picture of the European situation that is even worse than in 2024.
The author of a shock report in 2024 on the EU’s decline and the poor health of the Single Market (see EUROPE 13478/1), Mario Draghi, who was present at Alden Biesen, made the picture even bleaker, pointing to a further deterioration in the economic context since the presentation of his report and the urgent need to address all the problems he had raised at the time, a European source reported.
The Italian focused on several key points: the need to reduce barriers within the Single Market, efforts to mobilise European savings, the cost of energy, the possibility of a targeted European preference and the possibility of enhanced cooperation to speed up progress on some of these issues, if necessary.
On this point, some of the member countries had already said on Thursday that they are ready to move forward with enhanced cooperation on Capital Union and the necessary mobilisation of private capital to finance large-scale projects. Paris, Berlin, but also Stockholm are on this line.
Even the Irish Prime Minister, Micheál Martin, approved the idea, although having reservations about centralising supervision. Enhanced cooperation would enable progress to be made and “there’s nothing to be afraid of”, he said on arriving at Alden Biesen.
But the road to a consolidated Single Market in 2027 will not be a smooth one, because the EU27 obviously do not have exactly the same remedies. So while Belgium, Germany and Italy are calling for an ‘emergency brake’ on new legislative projects, others are questioning the feasibility of such a mechanism, which could require a change to the Treaties.
“There is already a yellow card for national parliaments”, explained one diplomat.
On energy, some member countries also agreed that the revenue from the ETS could be better redirected towards companies committed to decarbonisation. However, for countries such as Poland and the Czech Republic, the most important thing is to abolish the second phase of the system and return to free quotas.
There is also debate about how to protect the most critical sectors of industry, in particular the scope of ‘European preference’.
Emmanuel Macron is seen by some countries as too maximalist. The Netherlands, Germany, Italy and Belgium understand the need to protect certain sectors, but do not want a schizophrenic Union that seeks trade diversification on the one hand, and seems to restrict access to its markets on the other.
Another French ‘obsession’: the need for targeted joint debt projects to accompany major investments. Here again, Friedrich Merz will not be supporting “the idea of Eurobonds. Even if I were in favour of it, our federal Constitution would not allow it. In the past, they have only been authorised in extraordinary circumstances”.
However, the debate does not appear to be over. In fact, President Costa said on Thursday evening that the issue would have to be discussed again at the March European Council, during which a discussion on the EU budget post-2027 is scheduled. (Original version in French by Solenn Paulic with the editorial staff)