Europe is slowly realizing that the best way to manage future crises is to reduce exposure to them in the first place. Yet when heads of state and government debate the European Union's next budget, that logic often disappears.
When EU leaders gathered in Brussels last month to discuss the 2028 to 2034 Multiannual Financial Framework, familiar fault lines resurfaced.
Frugal countries such as Austria, Germany and the Netherlands are calling for deeper cuts. The 16 member states in the Friends of Cohesion group, primarily from Southern and Eastern Europe, are instead defending cohesion spending. France is pushing for new own resources. The debate is once again focused on who pays for what.
These discussions are regrettably disconnected from the broader debate in Brussels about competitiveness and security.
The missing debate on competitiveness
The recent energy crisis taught Europe another costly lesson: competitiveness is not only about productivity, but also about reducing vulnerability.
Europe still imports around 57% of its energy and has spent an additional €60 billion on fossil fuel imports since the crisis began. Every energy price shock, supply disruption or geopolitical crisis ultimately hits European households and businesses.
Brussels policymakers are beginning to realize that investments in electrification, grids, renewables and industrial transformation are also investments in resilience and security.
The European Commission's recent proposal to give member states greater fiscal leeway for clean energy investments reflects this shift. So do discussions around tax reform, efforts to make clean electricity more attractive than fossil fuels and state aid approvals, such as the approval of Italy's €23 billion renewables scheme.
Yet this shift is still largely absent from the MFF debates, and the debate over the European Competitiveness Fund in particular illustrates this disconnect.
The revised negotiating box prepared under the Cyprus presidency of the Council of the EU before its term ended in June proposed cuts of around 4% to both the Competitiveness Fund and Horizon Europe, while several net contributors continue to call for even deeper cuts.
By contrast, the European Parliament is debating what competitiveness should mean in practice: not only productivity and innovation, but also resilience, strategic autonomy and energy security.
But the overall signal remains contradictory. While clean industry is increasingly recognized as strategic, climate and environmental spending, along with MFF tracking requirements, continue to come under pressure.
Learning from the world
Other economies have already acted on these lessons, so why is the EU letting this opportunity slip through its fingers?
China offers perhaps the best example of how investment in energy systems can strengthen competitiveness.
For decades, Beijing has treated electrification, grid infrastructure and clean energy technologies as strategic assets.
The result is what some analysts call the world's first "electrostate": an economy built around abundant electricity and dominance in clean energy supply chains.
China plans roughly $574 billion in additional grid investment by 2030 and treats electricity infrastructure as a source of economic power.
The United States has come to similar conclusions and is scaling up grid investments under Donald Trump's administration.
Last year, the U.S. invested $115 billion in electricity grids, around a quarter of global grid investment and more than any other country. A significant share of this has been driven by federal funding explicitly linking grid modernization to industrial competitiveness and security.
The Commission estimates that around €600 billion in grid investments will be needed by 2030 to support electrification and system integration. Yet Europe still struggles to translate this into budgetary priorities.
The reports by former Italian prime ministers Mario Draghi and Enrico Letta both argue that Europe requires greater collective action and stronger investment capacity to compete globally.
Yet budget negotiations remain dominated by short-term national arithmetic.
The challenge now passes to the Irish presidency, which inherits one of the most difficult budget dossiers in recent years and will aim to produce the next negotiating box by October.
Its task is not simply to broker a compromise between net contributors and cohesion countries, but to shift the debate from who gets what to whether Europe is prepared to invest together to become less vulnerable.
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