Phoenix 24
Fragmentation is turning economic potential into lost scale.
Brussels
Europe may be losing at least €120 billion in investment every year because successful national systems are not being connected effectively across the European Union. A study by The European House Ambrosetti, prepared with Amazon, argues that fragmentation in transport, energy, technology, education and regulation is preventing proven models from scaling across borders. The finding shifts attention away from a simple shortage of ideas and toward a deeper structural problem: Europe already possesses strong national examples, but often fails to convert them into continental economic capacity.
The scale of the gap is significant. The study estimates that the €120 billion figure reflects only additional direct investment that could be mobilized through better integration, meaning the wider economic effect could be larger. It also sits against a broader competitiveness challenge identified in the 2024 report led by former European Central Bank president Mario Draghi, which estimated that Europe requires roughly €750 billion to €800 billion in additional annual investment to remain competitive globally. In that context, fragmentation becomes not merely an administrative inconvenience, but a measurable economic cost.
Energy provides one of the clearest examples. According to the study, European companies paid about 2.8 times more for electricity than their American counterparts in the first quarter of 2025, while deeper integration of national energy systems could generate as much as €43 billion annually by 2030. Transport shows a similar pattern, with cross border rail services reported to be 23.4 percent slower than comparable domestic routes despite decades of liberalization. Comparable barriers are also identified in artificial intelligence, digital infrastructure, taxation, labour markets, education and judicial systems.
The institutional constraint is equally important. National governments often have limited incentives to finance projects whose benefits extend beyond their own borders, while the EU budget remains small relative to combined national spending. The report contrasts €170.5 billion in EU expenditure with approximately €8.86 trillion spent by member states in 2024, illustrating how little centralized fiscal capacity exists for large cross border investment. That imbalance helps explain why projects with European scale can struggle even when their economic rationale is strong.
Brussels is already pursuing reforms in capital markets, industrial policy and company formation, including the proposed EU Inc. framework intended to make it easier for firms to operate across the bloc. Yet the strategic issue is increasingly one of execution speed. Europe does not appear to lack viable models. Its challenge is whether it can connect them quickly enough to transform national success into continental competitiveness.
Más allá de la noticia, el patrón. / Beyond the news, the pattern.