Competitiveness is a strange beast—always measured against outsiders, yet forged internally. In her annual address, European Commission President Ursula von der Leyen reminded us of a hard truth, one that “after Draghi and Trump” can no longer be ignored: competitiveness isn’t a game; it’s a matter of survival. And today, the fiercest battle isn’t abroad—it’s inside Europe, between a forward-looking, dynamism-driven mindset and the inertia of the old guard. The continent’s future hinges on which side wins.
After criticism over the EU’s tariff clash with Donald Trump, von der Leyen highlighted a lesson too often forgotten: trade wars don’t create jobs—they raise prices and breed confusion. Yet unless Europe dismantles its own internal barriers, the single market remains only “half-common.” Trade restrictions within the EU act like a 45% tariff on goods—and a staggering 110% on services. Tackling these obstacles is essential if Europe wants to compete.
It is encouraging that deregulation and efficiency are on the agenda. The plan promises less paperwork, fewer duplications, and simpler rules: a 25% cut in administrative burdens across the EU, and 35% for SMEs—saving an estimated €37.5 billion.
But old habits die hard. Alongside deregulation, the EU experiments with modern state intervention. The “28th legal regime” for startups, GDPR, and the AI Act attempt to preempt every conceivable risk, turning deregulation into a bureaucratic treadmill: “two in, one out.” No surprise, companies are crossing the Atlantic, where business is simpler. The digital euro, celebrated as a bold initiative, risks destabilizing the monetary system without a clear assessment of costs or consequences—a fate avoided in the U.S., where a similar project was halted.
The inertia shows up in the so-called “Quality Jobs Act,” intended to modernize work. But real mindset change is still elusive: human prosperity is still seen as the product of government programs, not the result of competitiveness and growth. Families struggle, costs rise, and in the name of social justice, the EU promises anti-poverty strategies. Yet the best tool against poverty is a growing, vibrant economy, underpinned by sound monetary policy—not endless spending programs. Growth and jobs should be natural outcomes, not bureaucratic gifts.
Lithuania faces the same tension. Economic survival cannot be divorced from social promises. Citizens know that wages and job security depend on the health of businesses—their ability to compete globally. Returnees will come only if taxes and business conditions are better at home. Pensions grow only if the economy thrives.
Cutting red tape with one hand while creating costly new programs with the other is not a survival strategy. As Lithuania takes the EU Council presidency, it has a chance to lead—not with more regulation, but through bold, results-driven competitiveness. Identify what works. Share expertise. Strengthen resilience. That is how Europe will survive—and thrive.
