ALDEN BIESEN, Belgium — For decades, single-market integration has drifted, leaving the European Union’s economy tangled in fragmented national regulations and siloed pools of capital.
But at an idyllic castle retreat in the Belgian countryside on Thursday, Europe’s leaders found unanimity on a surprisingly wide array of issues in their quest to solidify economic integration — mitigating concerns that Franco-German disagreements over common debt or "Buy European" provisions would derail negotiations.
Why now? After years of foot dragging, leaders from across the bloc said the growing threat from China and the United States has heightened the sense of urgency. “That can move mountains,” said European Commission President Ursula von der Leyen in a post-summit press-conference.
Unanimity was found amongst the 27 on implementing a pan-European company law known as the 28th Regime, moving forward on a Savings and Investment Union, continuing a Commission-led regulatory simplification and pursuing more trade deals.
“We are confronted with a completely new geopolitical situation which makes it imperative for the European Union to act,” said German Chancellor Friedrich Merz after the summit. “Europe will have to hold its own, but we can only do so if we are strong in economic terms.”
Von der Leyen promised a framework for “One Europe, One Market” during the next European Council meeting in March. If leaders can’t move ahead unanimously on the most important parts of that agenda by June, such as unified legal framework for businesses and pan-European capital markets, the Commission chief said she would support a smaller group of member states proceeding through the enhanced cooperation mechanism.
But leaders also stressed the hard work needed to turn that vision into reality.
“In theory we all agree to that,” said Belgian Prime Minister Bart De Wever about the ambitious new competition framework. “It will not be a project that will be realized in 2026, not even in 2027, but if it started here, then we have written history.”
U.S. and China threat drives consensus
For years, European leaders have pledged to strengthen the single market, even as a proposal for a common capital market alone languishing for over a decade. But Thursday’s meeting signaled a possible shift.
“The leaders in the EU are now realizing that we are increasingly in a world that will be dominated by the U.S. and China,” Chase Foster, a political economist researching market regulation at King’s College London, told The Parliament. “And the best way they have to maintain their model is to pool sovereignty in more areas, such as industrial policy and capital markets.”
Washington has pressured Europe to dial back its digital rules, which it sees as hostile to American firms. The bloc also remains deeply dependent on American digital technology, including for its defense, while lagging both the U.S and China in the artificial intelligence race.
Meanwhile, China has flooded the European market with cheap goods, dubbed the “Second China Shock” by economists. China’s trade surplus with the EU hit new highs in 2025, in the wake of U.S. tariffs that have sent Chinese goods to other parts of the world. China is now a net exporter of cars, a threat to the German auto industry, which Merz acknowledged during his press conference.
“The China shock is finally being internalized by the political class,” Arthur Leichthammer, a geoeconomic fellow at the Jacques Delors Centre in Berlin, told The Parliament. “Exports from China are really increasing, and you’re being challenged on your key crown jewel industries such as cars, chemicals, and other energy intensive industries.”
MEP João Cotrim de Figueiredo (Renew, PT) said that for the first time since he joined the European Parliament in 2024, there was a “coordinated sense of urgency” to swiftly advance economic reforms.
“Our decline has been announced by several people,” he said. “Now it’s upon us, and the geopolitical shifts make this decline more worrying.”
Von der Leyen also made explicit that she was ready to advocate for "enhanced cooperation" as early as June if European leaders didn’t move forward on the 28th Regime and Savings and Investments Union, calling the two proposals “enormously important building blocks.”
However, Foster added that the EU was proposing ambitious plans in response to crises, a phenomenon scholars call “falling forward.” Now, he said, those plans would likely be “watered down” by intergovernmental bargaining.
Progress, but Europe still divided
Of course, it wouldn’t be a true Council meeting without its share of disagreements. On Thursday, that started with a pre-summit breakfast meeting organized by Italian Prime Minister Giorgia Meloni during which left-leaning Spain and Ireland were absent. Belgium’s De Wever, however, insisting all countries had been invited.
The Franco-German rivalry also loomed over much of the conference.
Earlier this week, French President Emmanuel Macron argued for joint borrowing, or Eurobonds, to integrate the eurozone's economies and build a more robust industrial policy.
Merz quickly shot down the proposal, saying that while Eurobonds have been used in exceptional circumstances, they shouldn’t be normalized.
Another point of contention was protectionist trade policies. Macron wanted the EU to consider blanket protection against unfair imports, while Merz sought more limited measures that would target only certain sectors.
Berlin largely won out, with leaders settling on reviewing certain sensitive sectors, such as space, payment systems and clean tech — although they left the summit with less clear-cut conclusions than in other areas.
However, the stickiest point was the "Buy European" provisions in the upcoming Industrial Accelerator Act. France has argued for a narrow definition that would only include the European Economic Area. Meanwhile, Germany wanted a “Made with Europe” clause that would include countries with a close trading relationship with the EU, such as Japan and the United Kingdom.
European Council President António Costa said that there was broad agreement to use European preference in “selected strategic sectors,” while Von der Leyen said a proposal would be released before the next European Council.
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