Cristina Caffarra
A year ago to the day (of the conference) we gathered in the same Brussels hotel ballroom with a quivering sense of expectation: Can Europe Make It, through the Perfect Storm we feared was about to be unleashed? We were right, boy was it unleashed. And it was a storm much more dynamic and brutal than anything we were expecting. For the world and for Europe.
However, it is not the intention of this event to elucubrate on “risks to liberal democracy”, “slide to autocracy”, “we’re back to the 1930s”, “our European values”, “abandonment of the rule of law”, “rupturing of the world order”. We heard it all over the past year, and got it served up in concentrated form last week in the cacophony of voices emanating from Davos. Plenty of punditry from the Davos entitled sycophantic elites, and more from the armchair warriors watching from home, letting rip and giving voice to their personal beliefs, prejudices, biases, preferences, orientations and interpretations with wanton abandon. Godspeed.
The purpose of this conference is to make, insistently, one concrete point. That Europe needs to BUILD BUILD BUILD - aggressively, uncompromisingly, without more pensive hesitation and languid self-indulgence. I used the term “RE-build” in fact, as the conference theme because the reality is that Europe lost its historic primacy in multiple domains – unlike China, which strained all sinews to go from nowhere to superpower status, we have let go. Davos was also remarkable because alongside the fainting couches, the beating (and bleating) of chests (”we will stay firm! in the face of bullies!”), the bureaucrat-speak (“it’s a wake-up call, let’s do a SWOT analysis” from Lagarde, painful) there was also the most extraordinary series of mea culpa for Europe’s missed opportunities and strategic mistakes (Chancellor Merz on anything from energy policy to overregulation).
Only “building” (using our amazing talents and capabilities) and creating our own assets can stem our loss of status across the board, which means loss of economic power and (as we have seen) loss of political status and relevance too. No amount of further punditry from European desk warriors can change that. No amount of additional lamentations from civil society and think tanks and academics can change that. The geopolitical/geoeconomic imperative could not be clearer. We need industry and capital to BUILD. The rest is accessory.
In some way, the message from me personally is longstanding: for years as a niche antitrust specialist I have advocated (inter alia at my conferences) that competition/antitrust as an economic policy tool is only useful to society (as opposed to a torturous ritual just enriching lawyers and consultants) if it widens the horizon to industrial policy, growth and trade. If it helps economies to grow and people to prosper. I said it when no one else in the European antitrust bubble was, and had complete pushback for years: “antitrust is doing its thing, competition is a “side dish”, efficiency and consumer welfare, not to be mixed up with other tools, cannot help with economic growth etc.” Today you cannot move for antitrust conferences where the orthodoxy wants to catch up with me and discuss antitrust and industrial policy and trade and even sustainability (!) together (from CRA to DG Comp, they’re all at it – you’re welcome. Next year do defence and China and sovereignty).
But we’re beyond that. Because the salient question is no longer wrestling with “post-neoliberalism”, and what that means. We’ve left those questions behind. We’re now living through another turn of the political economy, and this one is much deeper, harsher, sharper, and consequential for Europe. My 2024 conference was titled “The Next World Order” and with no less than seven Biden Administration officials it was trying to digest the implications of a post-neoliberal vibe emanating from Washington: antimonopoly, aggressive antitrust enforcement, fight against digital platforms, industrial policy, trade policy, “all-of-government approach”, democracy. Europe was as usual behind and reluctant to embrace the Brandeisians’ more expansive approach – Lina Khan and Jonathan Kanter and Rohit Chopra and many more (our antitrust czar at the time, Margrethe Vestager, was in office for 10 years and left with nothing much to show beyond managing the orthodoxy – though later stated she wished she had done more). The conference back then was an exhortation to our institutions to look across the Atlantic and be bolder and explicit about society, freedom and humanity as the goal. Did not happen, and then the world order got upended.
This year, the conference is looking inward at Europe. Because the New Brandeisian project in the US is at best on hold; the US is no longer our benign protector – in fact no one cares about coming to Brussels from the Trump Administration at all (why should they pay a visit to the satraps of a distant weakening potentate?); and it’s payback time in Washington for the multiple ways in which the Rest of the World is deemed to have “taken advantage” of the US. Again I do not intend the conference to be a lament for European scattered illusions. The US entered a different era, and so did we. But what must be beyond dispute is that Europe needs to build, fast, at speed, brute-force-build because if we don’t, we are toast. What happens in the US is for Americans to decide. But our economic future and global standing will depend on our ability to restart a growth engine which is badly spluttering, under threat from China, have a modicum of credibility in defence, and recover a degree of agency and autonomy in tech instead of being vassals.
This is the only mission that Europeans should apply themselves to, relentlessly, today. Everything else is an indulgence, second order. There is a persistent reluctance to abandon the well-known playbook (call for more enforcement of the laws, babble about the dangers of fascisms, repeat derivative antimonopoly narratives), because so many in NGO grant-land confuse issuing declamatory prose on “European values! distributed governance! public value! democratic accountability! threats to our liberal democracies!” with actually doing something. No one cares other than their peers and the armchair warriors on LinkedIn or BlueSky. Industry switches off because the lack of any business savvy means there’s nothing in common. It’s a playbook that served us badly: building requires product focus, clarity on addressable demand, business model, USPs, KPIs, funding. The rest is public sector subsidies, standing in the way and pledging “protect democracy” in cosy like-minded Brussels meetings.
We need to face it: “building” is where we lost the plot also because we got overtaken by the “regulation” freight train. But note: I am not saying that overregulation killed European innovation - of course it did not help (hail 28th regime and E-acc!) but the reasons why European innovation has not flourished into success stories are multiple. What I am saying is we got blindsided by “tame the bad guys!” as our sole battle cry, without doing the really important thing: building our own. American friends please get it: bad enough if you have your own monopolies to deal with; for us, these are not even OURS. Don’t look at us to regulate your monopolies. We can’t and we won’t (even aside from fears of US pushback). We need to build our own stuff in Europe, and that requires deliberate effort and a plan. We fell instead for a blind spot. Fifteen years ago Europe was a pioneer in antitrust actions against US digital platforms that uniformly led precisely nowhere (Google, Amazon, Apple, Facebook, Microsoft), and when it became clear it was all a failure in terms of results, then we still got giddy with excitement at the thought of “regulating them” instead. Overall we spent the last 5 years engulfed in this narrative that “taming the platforms” was our mission, and we would be heroes and we would lead the world into a bright regulated future (when the vacuity of the “Brussels Effect”, now an embarrassment, was there for all to see).
“Self enforcing rules”, bicep emojis at every little steps as the bureaucracy congratulated itself. Industry, even complainants, were nonplussed. Now I said many times; have at it, I am not suggesting we abandon or dismantle regulation – the suggestion would only unleash more rivers of ink on the “capitulation of our democracy”. But let’s not pretend regulation was going to build us an industry. Only lawyers and civil society and academics with zero business experience can think that “hope for the best, the market will do it if you (somehow) nibble at the platforms” is a recipe for building.
Yes, tech platforms are weaponizing the Trump Administration with the absurd claim that regulation is a “foreign plot to discriminate and extract taxes from our successful American companies” – it’s absurd, but why should they not, if they can. Rational. And of course the European response is moral outrage and law professors claiming we MUST “defend the rule of law” as if that was the only thing that matters. But what if “the law is an ass” (not me, Dickens)? It cannot do anything given the monopolies are already entrenched, timing is too elongated, and remedies are toothless.
Yet the persistence with which we climb on our moral high horse, every time, and politicians and civil society and academics without a shred of business sense insist we MUST “enforce our rule of law” as the essence of our liberal democracy, is diabolical when that enforcement builds us nothing. It’s the equivalent of dying on a completely pointless hill. Why are we not saying “it was an experiment, it failed, now let’s be pragmatic and see where we must focus all energies”. “Get transactional”, said Julius Krein in my podcast. Does the future of Europe depend on Google Search? Or rules on the App Store? Sure, media and developers would do better with some changes to the rules of operation and a more favourable distribution of rents. Go ahead. Get a decision confirmed by the Courts in 10 years. Take it up with litigation. Maybe get some damages (while your lawyers get rich). We are busy building over here.
There’s more of course. Europe did not start to build defence capabilities four years into a war on our borders – until the US really dropped us. It’s extraordinary: this was the gist of Zelensky’s comments this last week – how can we not see that. The obsession with WTO rules above everything else, combined with the failure to understand that Biden’s IRA was an attempt (perhaps flawed, incomplete) to also try to build. The failure to act on all clear signs that the dependencies on China were becoming deadly.
Now: what and how should we build? The main pitch of the conference starts with digital assets – unsurprising, given the role digital plays in our lives and my commitment to EuroStack. Why should we care so much about Europe owning its own digital assets? There’s the obvious security/resilience narrative which says we are almost entirely dependent and thus vulnerable to the whims of external powers if they turn hostile. And that dependency cannot be “contracted away” because extraterritorial jurisdiction ultimately prevails – which is why all the “sovereignty washing” around is to be resisted as theatre. This point does not need to be made again – we all get it. But there’s MORE too: we also care because owning our own tech assets matters for Europe’s growth and productivity trajectory overall. China has driven forward relentlessly, lifting itself up from low-tech and in 15 years developing its own extraordinary tech and innovation ecosystem. We on the other hand are stuck – pockets of remaining excellence, bags of talent, but not where we need to be. Our lack of own tech assets is reflected in our shortage of high-growth innovative frontier firms, and is responsible for slower diffusion of tech and innovations in Europe, which will push our productivity growth down going further – especially in a world of AI.
The message eventually got through to governments, too: at the Berlin Sovereignty Summit in November 2025 Chancellor Merz and President Macron, together with their Ministers and senior officials, made firm commitments to digital sovereignty – with Chancellor Merz even calling out EuroStack as “𝗮 𝗰𝗼𝗺𝗽𝗿𝗲𝗵𝗲𝗻𝘀𝗶𝘃𝗲 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗳𝗼𝗿 𝗘𝘂𝗿𝗼𝗽𝗲. 𝗧𝗼 𝘀𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀. 𝗧𝗼 𝘀𝗲𝗰𝘂𝗿𝗲 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗿𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀. 𝗔𝗻𝗱 𝘁𝗼 𝗯𝘂𝗶𝗹𝗱 𝗮 𝗿𝗲𝘀𝗶𝗹𝗶𝗲𝗻𝘁 𝗮𝗻𝗱 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗹𝗲 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝘀𝗽𝗮𝗰𝗲.’ We will discuss at the event how national governments are taking forward this mission, what is the Commission doing (with DG Grow, DG Connect, DIGIT and EVP Sejourne’s Cabinet) and critically discuss with a major industrial player (Mercedes Benz) how private demand must be working with the supply side to practically reduce their dependencies on hyperscalers (putting their money where their mouth is).
Because digital and AI are all-purpose technologies that feed into every strategic sector, we will go next into how Europe’s manufacturing is threatened by the trade war with China in key advanced sectors where Europe used to have unique advantages, and where China’s deliberate effort to develop its own tech is supporting their challenge to us (e.g. robotics). Europe is at the receiving end of this trade/tech onslaught, and is not clear how to respond.
We will then move to defence: how can/will the imperative for massively expanded defence spending be a catalyst to revive Europe also as an industrial/tech powerhouse? Government spending on defence is known to have persistent long-term effects on productivity, innovation and output in tech – because by definition it is closely linked to advanced technologies and so very well suited to generate positive spillovers into the economy (dual-use etc). So defence could be a major accelerator for the “build effort” in Europe (if we can overcome the known problems of a fragmented structure, duplications, inefficiencies and national preferences…).
What about capital? In all of this, there are signs of real movement: against the established narrative (that a major reason we lost the tech race is we have big pots of savings in Europe but our financial institutions are risk averse or we send all of it to the US, so we lack risk capital and a CMU, we lack structures to IPO etc.), we have entered a new geopolitical reality which seems to be supporting a shift of sentiment in tech. There is a growing vibe that funders are “Going Long on Europe” because there are signs that things are moving - 28th regime, Scale Up Fund (what is it, where is it going?), Europeans in Silicon Valley who want to return and “make it”, “patriotic” European founders saying they want to stay and build trillion dollar companies here, private capital – PE/VCs with assets >>€1bn making commitments to Euro Tech Resilience, multiple family offices looking at rebalancing their portfolios towards Europe/European sovereignty/European resilience. This was a strong vibe in Davos. I am hopeful.
We will then bring back conservative US writer and commentator Julius Krein of American Affairs (who was so prescient at last year’s event on how the Trump Administration would approach Brussels, leaving the room reeling) and discuss how he thinks Europe’s sovereignty efforts will be received in Washington (and more).
And finally, we will return to the vexed topic of “regulation” with the Heads of three major antitrust agencies and the OECD Competition Chapter, to discuss how the regulatory effort needs to be re-pointed to serve our BUILDING goals. Tough one, as the antitrust world is so “small ball” and incremental, and generally very defensive to protect its arcane rituals. It takes a lot more than an incremental revision of the Merger Guidelines for the first time in 20 years, now open to consultation and perhaps coming into force with a few new paragraphs on dynamic competition in 2027… Antitrust seems to perennially condemn itself to move slowly and in small steps. Small relevance, obscure cases, contrived reasoning (for the latest example, read how DOJ litigators sought to transpose Judge Boasberg’s reasoning in the recent Meta monopolisation decision before a different judge in the LiveNation case – truly mindblowing contortions into pretzels, even for an antitrust specialist. No wonder antitrust is such a declining specialty sport). Again, what to do here?
In essence: we are in an entirely new political economy, where our established norms of globalism and international order have been comprehensively trashed by the extraordinary changes brought about by the US administration. Mark Carney was hailed as a hero in Davos by angst-ridden Europeans who felt someone was finally vocalizing their predicament – others found him “passive aggressive”. Sure (or “fo shur”, given the viral Macron meme) joining hands with “middle powers” has some value. But Europe needs to focus on itself, urgently and with “brute force”.
Build. We have talent, capabilities, money. Let’s redirect away from our obsession with “US giants” and all the rhetoric on taming their power, defending democracy, protecting us against the oligarchs. We call our regulators “brave” (EVPs Virkkunen and Ribera) when they make feeble pro-enforcement noises – but just proclaiming “we will be steady and enforce our rules” to the FT, and taking selfies in Davos is costless. I now regard that battle as broadly lost. Or something for the playpen, to placate the noise at home. In reality, it has been a distraction.
AI is going to be transformative and no amount of luddite pushback is going to make a difference. All that stuff is over. Keep at it if that’s your gig. But it’s on us (Europeans, businesses, funders) to make things happen: not on some hope that “the Commission” (or governments) will start an investigation of bikini Grok, enforce GDPR, simplify regulation, and generally weave a magic wand.
It’s on us Europeans to move. No excuses. And if we do, Europe will remain an amazing and wonderful place to be, our history, our proud centuries of endless wars and sublime art and horrors and wonders, our common DNA - for our future generations. `
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