EU Competitiveness: Leaders Discuss Industrial Strategy & China Concerns

Bilzen, Belgium – European Union leaders convened Thursday, February 12, 2026, at the Alden Biesen estate in Belgium for an informal summit focused on bolstering the bloc’s economic competitiveness, a meeting shadowed by growing concerns over pressure from Russia, China and a potential return of Donald Trump to the White House.

While initial reports suggested a potential clash between French President Emmanuel Macron and a newly aligned front of Germany and Italy, led by Chancellor Friedrich Merz and Prime Minister Giorgia Meloni respectively, leaders downplayed divisions. Meloni emphasized a convergence of views on industrial strategy with Merz, dismissing suggestions of an effort to isolate Macron. “It’s not something that we do against someone else, by excluding someone else,” she told reporters.

The meeting signaled a shift in the dynamics of European power, moving away from the “Merkron” axis of Angela Merkel and Emmanuel Macron that dominated the bloc for nearly a decade. The emergence of a strong partnership between Merz and Meloni, dubbed “Merzoni” by some observers, is quietly reshaping Europe’s power balance, according to analysts. This alliance, born of necessity, appears to be prioritizing a more pragmatic approach to economic policy than Macron’s more interventionist vision.

At the heart of the discussions is the proposed Industrial Accelerator Act (IAA), a plan to revitalize European industry and reduce reliance on external trade partners. While there was a degree of consensus on the concept of a “European preference” – prioritizing European companies in public procurement – details remain contentious. The Act aims to address concerns that Europe has fallen behind the United States and China in key technological sectors.

However, the draft legislation has already drawn sharp criticism from China. The Chinese Chamber of Commerce to the EU issued a statement warning that the latest version of the IAA is “likely to undermine the investment confidence of leading Chinese companies.” The chamber specifically raised concerns about mandatory local partnership requirements, deeming them “not commercially or technologically viable” in many cases. This highlights the delicate balancing act facing EU leaders: strengthening European industry while avoiding a full-blown trade war with major economic powers.

The effectiveness of the industry push, spearheaded by Industry Commissioner Stéphane Séjourné, remains an open question. Yanmei Xie, a senior associate fellow at the Mercator Institute for China Studies, expressed skepticism that new foreign direct investment (FDI) rules will be decisive. She argued that differing national agendas within the EU make it “a near impossibility” to build a united front against Chinese dominance, suggesting that the lowest common denominator will ultimately dictate the outcome.

The summit took place against a backdrop of heightened geopolitical tensions. The ongoing conflict in Ukraine, assertive actions by China in the South China Sea, and the possibility of a second Trump presidency are all contributing to a sense of urgency within the EU. Leaders are acutely aware of the need to strengthen the bloc’s economic resilience and strategic autonomy in a rapidly changing world.

Macron, while acknowledging the need for action, has advocated for a more proactive and interventionist approach, emphasizing the importance of public investment, reduced dependence on trade partners, and “Buy European” rules. This vision, however, appears to be facing resistance from Merz and Meloni, who favor a less protectionist approach aimed at fostering free trade and attracting foreign investment.

The informal summit is the first step in an intense month of politicking on EU competitiveness. The IAA is scheduled for release on February 25th, and leaders will reconvene for a full-blown summit from March 19th to March 20th to finalize their plans. The outcome of these discussions will have significant implications for the future of the European economy and the bloc’s role in the global arena.

The dynamic between France, Germany, and Italy is crucial. While Macron and Merz appeared to find common ground, with the German Chancellor stating they “almost always agree,” Meloni emphasized the strengthening of bilateral cooperation with Berlin while insisting it wasn’t intended to exclude others. This suggests a triangular relationship, with Berlin positioned as a key partner for both Paris and Rome, but with potential for friction as each nation pursues its own economic priorities.

The challenge for EU leaders will be to forge a consensus that addresses the concerns of all member states while effectively responding to the external pressures facing the bloc. The success of the IAA, and the broader effort to restore EU competitiveness, will depend on their ability to overcome these challenges and present a united front on the world stage.