The author is co-chief executive of the Brussels-based think tank Itinera Institute and the author of "European Superpowers: The EU's Silent Revolution"
“We all know what we have to do, but we don’t know how we will be re-elected once we have done it,” Jean-Claude Juncker said back in 2007 when he was president of the European Commission. Fast forward to 2025, and Europe's new "Juncker Curse" is that its politicians know what they have to do, but not how to pay for it. The current committee chairman, for his part, calls it “von der Leyen’s curse.”
Last year, Enrico Letta, Mario Draghi and Sauli Niinistö published at least three major reports urging European leaders to deepen market integration , promote innovation and investment in key sectors and technologies, and build self-reliance to respond to crises and conflicts.
This pursuit of prosperity, strength and security has come at an unprecedented cost. Draghi alone has advocated additional spending of 800 billion euros per year. Where should the EU find such funding? How can spending of this scale be mobilized to support shared priorities rather than narrow national preferences?
The most elegant solution is a large-scale public-private partnership program. In an ideal world, the EU, together with the European Investment Bank, would offer institutional investors and venture capitalists an offer they can't refuse: a stake in the continent's economic and technological future, through guaranteed government spending and/or protected markets capabilities as a revenue model. But coordinating the effort among the 27 member states from Brussels will be a difficult task. Consider that despite the horrors in Ukraine, a much simpler European mutual defense bond failed to materialize.
And then there are taxes. The EU is raising import tariffs, emissions taxes and other taxes to level the playing field in the European market and make it sustainable, potentially investing tens of billions of dollars every year. However, taxes can be counterproductive if they harm the European industries we seek to preserve and protect. They could be downright damaging if they end up hurting companies in countries with which Europe does not want a trade war.
What remains is the debt mechanism. But the stability of Europe's unfinished monetary union imposes precautionary budget discipline on member states. Strategic investment deficits are still possible but would require country-by-country negotiations with the Commission. Common European debt invested directly from Brussels is the political Rubicon that member states still have to cross.
Not only does the EU have too few resources, it also doesn’t know how to use the resources it has available quickly and effectively. The process is slow, bureaucratic and often less than transparent for participating companies or countries. The EU must compete with China, Russia and the United States in a global arms race of state capitalism and mercantilism. But Brussels has neither the political clout nor the financial clout to compete with Beijing, Moscow or Washington.
If the EU really wants to realize its ambitions, the existing platform for important projects of common European interest can be a stepping stone, provided it can be scaled up and accelerated. More likely, an ecosystem of investment initiatives and instruments will be created outside of formal EU programmes, through a coalition of investors and/or member states.
First-mover advantage will come into play, as countries with interests in strategic areas can gain future market share by contributing to the EU's collective ambitions. Poland, for example, has been a leader in mobilizing public spending on defense and security capabilities along Europe's eastern borders and the Baltic Sea region.
This is how to lift the von der Leyen curse. Elevate state aid to a coordinated transnational level by allowing a coalition of countries to combine their own interests and form strategic partnerships with their industries.
Forget the old separation of European markets from domestic state aid – the latter serves the integration of the former for geopolitical purposes. Forget about the decision-making mechanisms that often block EU action and instead create space for ad hoc arrangements within the EU’s overall strategy. Forget even the distinction between member states and third countries – what matters is the right geopolitical alliance that supports EU policies, including countries with security and defense concerns such as the UK. It turns out that lifting the curse of von der Leyen might even lift the curse of Brexit.