Europe can fill its hotels while losing the capacity to make the materials, finance the businesses and build the infrastructure on which its future depends.
That is a risk, not a prediction of inevitable decline. Tourism is a valuable industry. The problem would be allowing Europe's attractiveness as a destination to become a substitute for its competitiveness as a place to produce, innovate and invest.
The uncomfortable question is whether governments are willing to surrender enough national discretion to preserve meaningful collective power.
MITUXA View: Europe's vulnerability is not simply insufficient spending. It is the mismatch between continental ambitions, national incentives and the economics of keeping industrial capacity in operation. Steel, chemicals, energy and defence belong in the same conversation.
A single market with an internal bill
There are no general customs duties on goods moving between EU member states within the customs union. Describing national differences as literal tariffs between France, Germany and Portugal would be wrong. European Union: customs union.
But removing customs barriers does not automatically make every business activity equally easy to scale across borders. Telecoms illustrate the distinction. In September 2024, Mario Draghi called for greater coordination of regulation and spectrum allocation to support European scale. That is a dated diagnosis, not a claim that every rule has remained unchanged since then. Reuters, 30 September 2024.
MITUXA View: whenever expansion requires duplicated procedures, systems or approvals, fragmentation absorbs money that could otherwise fund growth. This is an economic cost, not a single tax collected by Brussels. Its size differs by sector; it should not be reduced to one convenient headline percentage.
Integration should make it easier to compete across borders. It should not merely allow incumbents to merge and charge more. A larger telecom operator is useful if scale improves investment, service and productivity—not simply because its headquarters are European.
France and Germany: European ambition, national invoices
Who gets the factories? Who bears retaliation? Which government accepts the loss of an existing industrial role?
Trade policy exposes these tensions. In April 2025, German carmakers opposed EU tariffs on Chinese electric vehicles and supported negotiations, while French cognac producers were affected by Chinese retaliatory measures. The same dispute created different incentives across industries and countries. These events illustrate a conflict of exposure, not permanent national positions. Reuters, 10 April 2025.
MITUXA View: neither Paris nor Berlin should be allowed to treat its own industrial interests as an automatic definition of Europe's interests. Equally, smaller member states cannot demand collective strength while rejecting every adjustment that affects them.
The difficult part of sovereignty is not announcing a common objective. It is agreeing who must compromise to achieve it. Nuclear investment, defence procurement and industrial subsidies should all face that test: what capability is delivered, at what cost, and who is accountable?
Steel: protecting the border does not fill the order book
Reuters reported in June 2026 that European steel capacity utilisation was around 67%. New EU arrangements cut annual tariff-free import quotas to 18.3 million tonnes and imposed a 50% duty above quotas. EUROFER expected utilisation to recover only to 73–75%, below the 80% policy objective, because demand remained weak. Those recovery figures were expectations, not achieved outcomes. Reuters, 30 June 2026.
MITUXA View: trade protection can provide breathing space. It cannot, by itself, generate orders, make electricity cheaper or finance the replacement of ageing equipment.
There is also a distributional problem. Protecting a steel producer can increase costs for a European manufacturer using that steel. A policy that improves upstream margins while undermining downstream competitiveness may shift the industrial problem rather than solve it.
The right test is therefore broader than whether imports fall. Does the policy restore viable production, enable investment and preserve competitive manufacturing further along the chain?
Sovereignty bought through permanently uncompetitive production can become an expensive subsidy commitment. Sovereignty abandoned through indiscriminate closures can become an expensive supply dependency. Policy must distinguish between them.
Chemicals: the warning is measured in capacity
A Roland Berger study commissioned by Cefic tracked European chemical capacity announcements from January 2022 to 8 December 2025. Its findings include:
| Measure | Reported result |
|---|---|
| Annual capacity announced for closure across Europe | About 37 million tonnes |
| Share of the production-capacity universe assessed | About 9% |
| Closure capacity within the EU-27 | About 32 million tonnes |
| Capacity associated with confirmed investments across Europe | About 7 million tonnes |
| Direct jobs affected by closure announcements | About 20,000 |
These are announced closures, not a tally of shutdowns already completed. Confirmed investments include approved projects, construction starts and operating facilities; they are not all immediately available capacity. The geographical scope extends beyond the EU, and the study excludes some chemical segments.
Energy competitiveness was the leading reason cited by companies in 49% of closure announcements, followed by weak demand in 19%. These are reported corporate explanations, not independently isolated causal effects. Roland Berger/Cefic, published January 2026, especially pages 2, 4–7 and 13.
MITUXA View: the strategic concern is the combination of closures and insufficient replacement investment. An industrial cluster is more than its largest plant. Losing an upstream supplier can change the economics of nearby customers, utilities and specialist services.
Not every closure should be prevented. Obsolete capacity sometimes needs to disappear. The question is whether more competitive activity replaces it locally—or whether capabilities, skills and future investment leave together.
Defence: count capability, not announcements
There is no verified basis here for claiming that Europe has only “19 defence projects.” The term mixes several different things: collaborative initiatives, national procurement programmes and equipment types.
The European Defence Agency's May 2025 PESCO update recorded 83 projects launched since 2018, eight closed and 75 ongoing. These are cooperative projects; they are not a count of competing weapons programmes or all defence activity in Europe. This is a dated official baseline, not a newly verified September 2026 inventory. European Defence Agency, 27 May 2025.
Equipment diversity is a separate issue. The Bank of Finland, citing Draghi's 2024 report, notes a comparison of 12 European battle-tank types with one in the United States. That historical comparison illustrates fragmentation; it should not be relabelled as a current project count. Bank of Finland, 2025.
MITUXA View: more money does not guarantee proportionately more usable military capacity. Multiple specifications can multiply training, spare-parts and maintenance requirements. Conversely, a joint programme can fail if work-sharing negotiations overwhelm operational needs.
Some redundancy is strategically valuable. A single supplier can also be a vulnerability. The objective should be compatible capabilities, dependable supply and efficient production—not uniformity for its own sake.
The industrial connection matters: procurement ambitions ultimately require materials, energy, equipment and skilled workers. Defence budgets cannot be assessed separately from the production system expected to fulfil them.
Energy: targets do not transport electricity
It is inaccurate to say that Europe has no common energy policy. The Energy Union strategy dates to 2015 and covers security, market integration, efficiency, decarbonisation and innovation. The Council's archived overview also identifies infrastructure modernisation and integration as challenges. That page is historical background, not a complete account of September 2026 policy. Council of the EU: Energy Union.
MITUXA View: the relevant distinction is between a common framework and an industrial customer receiving dependable energy at a competitive total cost.
Production in one region cannot relieve shortages elsewhere without usable connections. Announcing electrification does not ensure timely grid access. Subsidising a bill may keep a plant operating while leaving its underlying disadvantage intact.
Climate objectives and industrial competitiveness must be designed together. Otherwise, Europe risks recording cleaner domestic production partly because production has moved elsewhere. Establishing that outcome requires evidence on actual relocation and emissions; it cannot be assumed from every factory closure.
America and China do not need a joint plan
MITUXA View: external pressure can weaken European capabilities without any coordinated American-Chinese strategy.
A business deciding where to invest compares customers, costs, financing, infrastructure and policy certainty. If another location offers a better combination, investment can move even when executives express loyalty to Europe.
Likewise, lower-priced imports can benefit households and manufacturers while compressing the margins of domestic suppliers. Whether that is beneficial competition or a dangerous dependency depends on the product, market structure and availability of alternatives.
Blaming Washington and Beijing for every European difficulty would let European governments avoid accountability. Preserving every existing factory would be equally unconvincing. The practical challenge is to remain an attractive location for the next generation of productive investment.
Europe's rivals do not need Europe to fail. They only need Europe to remain a less compelling place to build.
What investors should watch
MITUXA investment stance: selective, not a blanket bet on European recovery.
Our working horizon is three to five years. Conviction is stronger in the need to examine industrial bottlenecks than in predicting the timing of political reform. This is a research framework, not a list of securities to buy.
| Area | Evidence worth following | Investment trap |
|---|---|---|
| Electricity infrastructure | Connections completed, delivery capacity and cash conversion | Assuming every order creates attractive returns |
| Industrial efficiency | Customer savings, repeat demand and pricing power | Treating a subsidy as durable demand |
| Defence suppliers | Funded orders, production readiness and on-time delivery | Confusing announced budgets with earnings |
| Steel and chemicals | Sustainable utilisation, energy economics and balance-sheet resilience | Buying solely because valuation multiples look low |
The policy beneficiary is not automatically the shareholder winner. High capital requirements, weak pricing power, dilution or poor execution can consume the value of rising demand.
What would change our view?
The pessimistic case would weaken with sustained evidence of productive investment replacing closures, competitive energy reaching industrial customers, joint defence programmes delivering equipment efficiently and businesses scaling across borders with fewer duplicated costs.
It would strengthen if protection rose without investment, if new spending produced bottlenecks rather than output, or if restructuring repeatedly reduced the local supplier base without creating more productive replacements.
Neither scenario should be judged by summit declarations. The evidence belongs in completed projects, operating economics and returns on invested capital.
The price of refusing to choose
Europe need not choose between preserving its quality of life and building competitive businesses. It does need to confront the choices that connect the two.
Collective strength may require a government to accept that the next plant, contract or research centre goes elsewhere in Europe. It may require protecting a critical capability while allowing an inefficient incumbent to fail. It certainly requires measuring results rather than equating spending with progress.
Europe can remain a place the world wants to visit. The harder task is remaining a place the world needs to build.
A sovereignty strategy that cannot keep economically essential production viable is an ambition without a production plan.
Research and methodology
Sources are linked beside the relevant claims. Publication dates and measurement periods differ. PESCO counts and the tank comparison are historical baselines, not current inventories. Chemical figures refer to announcements over a defined period and coverage universe. Steel recovery estimates are forecasts attributed to EUROFER through Reuters. Cefic and EUROFER represent their industries; their data and policy positions should be read with that institutional perspective in mind. Interpretations are labelled MITUXA View or presented within the investment framework. No consensus earnings estimates or company valuations are used.
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For information and discussion only. Not financial advice. Investment outcomes are uncertain; policy support does not guarantee shareholder returns.