Europe’s old economic advantages are gone, Von der Leyen warns

European Commission President Ursula von der Leyen
Photo: AFP

Cheap energy, open trade and American protection once underpinned Europe’s prosperity. The European Commission president says those days are over, EU perspectives reports.

Speaking at the annual Rencontre des Entrepreneurs de France at Roland-Garros, European Commission President Ursula von der Leyen pointed to a mounting squeeze on European businesses. High energy prices, complex regulation, an incomplete single market and competition from companies operating under different conditions are all eroding the bloc’s competitiveness. She said the EU must become “a continent that produces, invests and protects”, placing industrial capacity at the centre of its economic policy.

“For a long time, the European economic model was based on a few clear assumptions. Cheap imported energy. Open global trade. Growing access to the Chinese market. American strategic protection. And Western technological progress,” Ms Von der Leyen said. “These have disappeared.”

“Nowadays, it is the main factor limiting our competitiveness and independence. Prices in Europe are still twice or three times higher than in the United States or China. And more than half of the energy that we use still comes from imported fossil fuels. This dependence is costly. Since the start of the crisis in the Middle East this dependence has already cost us over EUR 50 billion more. Without us receiving a single molecule of extra energy. For that reason, we must produce our own low-carbon energy in Europe.”

China trade deficit approaches €1bn a day

Ms Von der Leyen said the EU wanted to reduce economic risks linked to China without breaking ties, but could not continue accepting major trade imbalances. Chinese imports into the EU have increased by 45 per cent over five years while European exports to China have declined.

The bloc’s trade deficit with China now approaches €1bn a day, she said, adding that every member state had recorded a deficit this year for the first time. Recent Eurostat data show that the EU’s quarterly goods deficit with China widened from €66bn in early 2024 to €103bn in the second quarter of 2026. However, it remains slightly below the quarterly peak of €107bn recorded in 2022.

Europe also relies on China for more than 80 per cent of several critical raw materials and up to 90 per cent of some rare earths. “Dialogue with China remains necessary. But it must produce results,” Ms Von der Leyen said. “When dialogue is not enough, we must be ready to make full use of our instruments.”

Energy limits European competitiveness

Energy remained the main factor limiting Europe’s competitiveness and independence, Ms von der Leyen said. She put European energy prices at two or three times those in the United States or China. Even before the current Middle East crisis, the International Energy Agency found that electricity prices for energy-intensive EU industries averaged more than twice US levels in 2025.

The latest disruption has intensified that pressure, with oil prices rising sharply after the conflict began. Higher fossil-fuel import costs since the beginning of the Middle East crisis have added more than €50bn to Europe’s energy bill without providing any additional energy, Ms Von der Leyen said.

For a long time, the European economic model was based on a few clear assumptions. These have disappeared. — Ursula von der Leyen, European Commission President

Beyond energy, Ms Von der Leyen also called for European savings to be directed towards European companies. Around €10tn remains in household bank accounts, while a substantial share of the continent’s capital is invested abroad. She said proposals under the Savings and Investments Union could unlock up to €470bn in additional investment and called for an agreement by the end of the year.

...The EU must be seriously impoverished if Ursula is proposing to use 10 trillion euros of its citizens' personal savings for its needs. If this proposal is implemented, it will be the heist of the century in Europe!

Hey, Europeans, save your money before Ursula takes it!

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