Analysis: The Competitiveness Obsession

Thesis 1: It is impossible to raise competitiveness across all economies at once

Competitiveness is a relative concept; improving one's position necessarily worsens another's. In contrast, sustainable prosperity depends on productivity, which can be increased in absolute terms.

Thesis 2: Living standards can be improved only through higher productivity

The EU has focused on competitiveness without adopting a coherent strategy for productivity, investment or industrial development. Long-term living standards can only rise with productivity, so competition must drive innovation, efficiency and structural transformation rather than just cost and wage cuts.

Thesis 3: The fixation on competitiveness undermines domestic demand

A focus on competitiveness encourages large economies to rely on wage restraint, spending cuts and lower standards, thereby weakening domestic demand. As external trade cannot provide sufficient economic stimulus for the EU, domestic demand must be central to securing stability, prosperity, and resilience.

Thesis 4: Europe’s obsession with competitiveness has harmed its economy

One-sided adjustments, particularly in countries with budget deficits, have slowed investment, innovation, and productivity. Short-term cost cuts have dominated, resulting in weak growth, declining economic dynamism, and long-term harm to Europe’s development capacity.

Thesis 5: Better competition, not just more competition, is key

Low productivity and growth stem from a model that pits states against each other. Instead, high-quality competition based on investment, innovation, and structural change — not wage cuts or deregulation — can collectively raise productivity, secure sustainable growth, and strengthen Europe’s global position.