Europe must stop squandering the power of its purse

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Public procurement accounts for about 14 percent of the EU’s gross domestic product, making it one of the bloc’s most powerful tools for shaping markets and advancing its policy goals. But a recent evaluation by the European Commission confirms what many governments and businesses already suspected: The current framework has fallen short of making public spending simpler, more strategic, and greener. With over 75 percent of public contracts still lacking environmental criteria, it is no wonder that spending is so poorly aligned with the EU’s stated industrial and climate objectives.

European Commission President Ursula von der Leyen has made procurement reform a central part of the EU’s new strategic agenda, linking it to the proposed Industrial Accelerator Act and the goal of creating “Made in Europe” markets for clean technologies. In her latest state of the union address, she emphasized the need to boost domestic production and decarbonization together, not at the expense of one another. Similarly, Stephane Sejourne, a European Commission executive vice-president, has highlighted public procurement’s potential as a lever for ensuring competitiveness, resilience, and economic security.