On Thursday (12 February), European Union heads of state and government gathered at Alden Biesen castle in Belgium for an informal retreat focused on one central question: how to make Europe’s economy more competitive in a tougher global landscape. Joined by Mario Draghi and Enrico Letta, authors of important reports on EU competitiveness, leaders discussed investment, strategic autonomy, and the future of the single market. The goal, as European Council President António Costa put it, is clear: “to strengthen economic growth in Europe” in order to protect prosperity, quality jobs and Europe’s social model.
A simpler, stronger single market
At the heart of the discussions was Europe’s single market. With 450 million consumers, it is one of the largest markets in the world. Yet leaders acknowledged that it remains incomplete, with national barriers and complex rules still holding businesses back.
President Costa stressed that Europe must move towards “one market for one Europe”. That means cutting red tape and simplifying European Union rules so companies can operate more easily across borders. Leaders unanimously backed a push to streamline legislation and reduce administrative burdens on businesses.
One flagship proposal is the creation of a so-called “28th regime”. This would introduce a single set of corporate rules that companies could choose instead of navigating 27 different national systems. In practical terms, a business could register and operate across the EU under one harmonised framework, making it easier to scale up and attract investment. Leaders want tangible progress on these reforms in 2026 and 2027, with further commitments expected at the formal European Council meeting in March.
Capital markets and investment
A recurring theme throughout the retreat was investment — or rather, the lack of it. Much of the conversation focused on mobilising private capital. Leaders agreed to accelerate work on a Savings and Investment Union, an initiative designed to channel Europe’s substantial household savings into productive investments within the continent. The idea is to create a more integrated financial system that helps companies access funding more easily, particularly in high-tech and innovative sectors.
However, the idea of issuing permanent joint European debt, often referred to as “eurobonds”, proved divisive. French President Emmanuel Macron has argued that common borrowing could finance strategic sectors such as artificial intelligence, quantum computing, defence and clean technologies. He has framed eurobonds as a way to strengthen Europe’s position and even as a potential alternative investment to the US dollar. However, German Chancellor Friedrich Merz firmly rejected the proposal, and other countries appear wary of the idea of common debt.
Industry and strategic autonomy
Strategic industries were another priority. There was broad agreement on the need to protect and strengthen sectors such as defence, space, clean technologies, artificial intelligence and advanced payment systems. Leaders discussed mapping Europe’s dependencies, for example, on critical raw materials or foreign technologies, and reducing them through diversification strategies.
In certain sectors, such as telecommunications, leaders signalled openness to allowing more consolidation between companies to create stronger European players capable of competing globally. However, this would be tied to a “social contract”, ensuring that larger firms reinvest in innovation and deliver benefits for consumers and workers.
Conclusions
This informal retreat did not produce binding decisions, but it set the direction for the months ahead. Concrete commitments, deadlines and legislative proposals are expected at the March European Council, when the European Commission will present a roadmap for deepening the single market and boosting growth. As President Costa concluded: “In 2026, Europe will deliver. We did on defence last year, we will on competitiveness this year.”
