Europe Must ‘Reboot’ Its Growth Approach, Macron Warns at Berlin Summit

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French President Emmanuel Macron has called for a fundamental shift in the European Union’s approach to economic growth, warning that the bloc risks falling behind the United States and China within the next three to four years if changes are not made. Macron’s remarks were delivered during the Berlin Global Dialogue, where he emphasised the need for the EU to rethink its economic model to remain competitive on the global stage.

Citing the current trajectory of EU economic policy, Macron stressed that the current approach is no longer aligned with the union’s goals and the realities of global competition. “If we continue with our old growth model, we will be uncompetitive in three or four years,” Macron said, highlighting the urgent need for reform. He pointed out that the EU is at risk of becoming irrelevant in international markets, potentially reduced to merely adjusting to surplus capacities from China and the United States.

The French President’s call for reform comes amid rising concerns about the EU’s diminishing competitiveness, particularly in key industries such as automotive manufacturing, which has been heavily reliant on exports to China. Macron pointed out that much of the EU’s growth in recent years has been tied to factors that are no longer sustainable, such as access to cheap Russian energy and a robust US defence umbrella.

Dependence on Traditional Sectors

Macron’s warning specifically targeted the EU’s dependence on industries that have long been central to its economic success. The automotive industry, in particular, has been a key pillar of European growth, with substantial exports to China providing critical revenue streams. However, with China investing heavily in its own manufacturing capacities and increasingly becoming a competitor in the electric vehicle market, the EU faces a challenge in maintaining its market share.

Furthermore, the reliance on Russian gas, which had long provided the EU with affordable energy, has been severely disrupted by geopolitical tensions, particularly the ongoing war in Ukraine and the subsequent sanctions on Russia. This has forced Europe to seek alternative energy sources, often at higher costs, further undermining its competitive edge.

The third pillar Macron identified is the EU’s reliance on US defence support, which has allowed European nations to reduce their defence spending. However, with shifting global dynamics and growing calls within the US to re-evaluate its defence commitments to Europe, this dependency is increasingly seen as a vulnerability.

A Wake-Up Call for Europe

Macron’s remarks are a clear signal that the EU needs to adapt quickly to the new realities of the global economy. He urged the EU to “wake up” and recalibrate its policies to ensure long-term growth and stability. “I truly believe that we are in danger,” Macron warned, pointing to the need for Europe to develop a more self-sufficient and resilient economic model that is less reliant on external factors.

His comments align with the recent publication of a report on European competitiveness by former European Central Bank President Mario Draghi. The report warns of a “slow agony” for Europe if it fails to assert itself in the global economic arena.

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