Heads of State and Government call for less red tape, greater speed and stronger cooperation.

On 12 February, Europe’s Heads of State and Government met in Alden Biesen (Limburg) to chart a course for injecting new momentum into the European Union’s efforts to strengthen its competitiveness, a process that has recently stalled. No formal conclusions were adopted, as the meeting took the form of an “informal economic summit”. However, with a view to an action programme to be presented by the end of 2026, participants agreed on a number of key priorities. At the same time, they called for greater urgency, underlined the need for unity and signalled their readiness to take difficult steps if necessary.

Germany stated that, if necessary, countries must be forced to restrict “their national scope for action in the interests of the common market.” Failing this, smaller groups of countries might have to move ahead on their own. This position is also in line with that of Commission President Ursula von der Leyen, who has repeatedly indicated that the mechanism of enhanced cooperation could be used if necessary. This would require the support of only nine Member States.

Time to Get Your Act Together

The informal summit explored how the European Union can continue to ensure prosperity for its citizens on the basis of a well-functioning and internationally competitive economy. Against the backdrop of geopolitical shifts and growing uncertainties, discussions also focused on bridging divides among Member States and consolidating the Union as a strong economic area.

Buy European?

One such divide concerns the extent to which prioritising production within Europe constitutes an appropriate strategy to enhance competitiveness. In the run-up to the summit, six Member States (Sweden, Finland, the Baltic States and the Netherlands) warned against such an approach in a joint non-paper. They argued that European preference criteria would increase administrative burdens, complicate trade with other markets and potentially drive investment out of the EU. Internal Market Commissioner Stéphane Séjourné is known to support this line. He is supported by the Commission President, who circulated her position in a letter to the European Council ahead of the summit. Notably, the German non-paper makes no reference to a “Made in Europe” approach.

Simplification – but in a Balanced Manner

However, there is broad agreement that the EU’s core asset – the Single Market – must be strengthened and existing barriers removed. This includes further advancing the Savings and Investment Union, aimed at reducing fragmentation in EU financial markets in order to facilitate capital flows and promote investment. For the German Federal Government, key priorities include the modernisation of competition law; improved mutual recognition of professional qualifications to enhance labour mobility; simplification of trade in goods; and streamlined rules for cross-border services.

While these objectives are broadly welcomed, the proposals must withstand a reality check. For example, in a non-paper entitled “Action Plan for the Internal Market,” the Federal Government advocates the widest possible use of the planned eDeclaration – a common, standardised and digital procedure for notifying the posting of workers within the EU. However, its longer-term proposal to allow both the notification of posting and the application for the A1 social security certificate via the same portal fails to take into account the different target groups involved and risks undermining investments made in recent years in national digital notification systems. Statutory Health and pension insurance institutions have expressed concern in this regard.