The European Union’s economic debate has been dominated for years by concerns over productivity gaps, the incomplete Single Market, and the pace of innovation. Yet a new hierarchy of priorities is emerging. According to the European Parliament’s recent study Strategic Autonomy and European Competitiveness: Security Now Comes First (EGOV, European Parliament, December 2025), the EU can no longer treat competitiveness and security as separate tracks. Security has become the prerequisite for every other policy goal.
The report opens with a stark diagnosis: escalating geopolitical instability has exposed defence dependencies that leave the Union vulnerable to coercion. European countries still import over half of their major defence systems from the United States (55% between 2019 and 2023) placing critical capability choices in the hands of an external power. While the EU spends far more on defence than Russia, fragmentation, lack of scale, and limited readiness continue to undermine its strategic position. The study stresses that increasing war-readiness and coordinating investment—especially as NATO allies move toward the new 3.5% of GDP spending target—is now an urgent imperative.
This security lens reshapes how Europe must approach its systemic dependencies. The authors identify three structural clusters: critical raw materials, energy, and semiconductors. The report notes that the EU depends on China for 100% of its heavy rare earth elements—vital inputs for wind turbines, electric vehicles, and defence equipment—and for 70% of its total rare earth imports. Energy dependency remains high, with more than half of EU needs met by imports, making the continent acutely vulnerable to price and supply shocks. Semiconductor manufacturing capacity also lags well behind Asian and US competitors, despite strengths in equipment and design.
The study connects these vulnerabilities to the EU’s long-term structural weaknesses. Declining demographics, stagnating labour mobility, and widening productivity gaps with the United States—especially in the ICT sector—limit the EU’s ability to finance and execute ambitious transitions.
Against this backdrop, the authors revisit the Draghi and Letta competitiveness blueprints. Progress, however, has been uneven. Only 11% of Draghi’s 380 recommendations have been implemented so far, with the fastest advances occurring in critical raw materials and energy-intensive sectors, while pharmaceuticals, energy and space fall behind. The report warns that without a coherent, urgent pivot toward scale, coordination, and speed, Europe risks remaining trapped in a fragmented policy landscape.
The study’s most consequential contribution is its call for a three-tier strategy, reordered to place economic and military security above all else.
Tier 1 actions demand immediate reduction of dependencies: defence capabilities, critical raw materials, energy costs, and regulatory simplification.
Tier 2 launches medium-term “big builds” around decarbonisation, AI/cloud sovereignty, and the digital euro.
Tier 3 unlocks the enabling reforms—capital markets, skills, and trade diplomacy—to make strategic autonomy durable.
The concluding message is clear: Europe can no longer optimise for performance alone. It must design for resilience in a world where uncertainty “has become the baseline”. An EU capable of acting independently—militarily, technologically and economically—is not a luxury but a precondition for future competitiveness and for the credibility of Europe’s global stance.
This shift may not align with Europe’s traditional preference for open markets and multilateralism. But, as the report bluntly states, “this is no longer reality”. The sooner the Union organises itself around this new paradigm, the sooner it can restore the strategic space needed to pursue growth, stability and international cooperation on its own terms.