Report

Resilient growth

This report from UK think tank the Centre for European Reform looks at aligning productivity and security for resilient growth.

Europe’s economic model is under increasing strain as productivity growth stalls and geopolitical competition intensifies. A new CER policy brief, ‘Resilient growth: Aligning productivity and security’, by Aslak Berg and Zach Meyers, argues that the EU must adopt a disciplined and targeted approach to economic security, so as not to compromise the bloc’s competitiveness goals.

The brief warns that the proposed €400 billion European Competitiveness Fund (ECF) – a centrepiece of the European Commission’s 2028–2034 budget proposal – risks being both too broad and too narrow. It is too broad because, while intended to boost innovation and reduce the bloc’s dependencies, the ECF currently lacks a framework to prioritise risks and could channel large sums into poorly targeted interventions. It is too narrow because the proposal overlooks tools such as trade diversification, regulatory reform and improvements to Europe’s business environment, which could address many vulnerabilities more effectively than subsidies alone.

The authors set out a structured approach for assessing which dependencies are most harmful, based on the concentration of suppliers, the availability of alternatives, and the geopolitical trustworthiness of trading partners. They argue the EU should first consider open-economy solutions – such as deepening the single market, improving regulatory coherence and strengthening trade relationships with trusted partners – before turning to more interventionist industrial policy.