EU overhauls public procurement rules to prioritise innovation and European industry
EU’s New Procurement Rules Aim to Shield European Industry from Unfair Competition
Brussels, 04.07.2026 — The European Union is set to overhaul its public procurement rules in September, shifting focus from price to innovation, European preference, and resilience in a bid to counter unfair competition from China and the United States. European Commissioner for Industry Stéphane Séjourné announced the reform on Saturday, marking a significant pivot in EU industrial policy amid growing concerns over market distortions.
Speaking at an economic forum in Aix-en-Provence, Séjourné revealed that 30% of procurement criteria will no longer prioritize cost but instead emphasize innovation, European production, decarbonization, and social clauses. The reform targets Europe’s €2 trillion annual public procurement market—equivalent to 15% of the EU’s GDP—aiming to redirect billions toward strategic sectors. “This is about reorienting billions of euros to adapt our model to a rapidly changing international trade environment,” Séjourné said, citing unfair competition from China and U.S. tariffs as key drivers.
The move follows Séjourné’s earlier announcement in July that the EU would prioritize European-made components in sectors like clean energy and automotive, a policy already adopted by the European Commission and under review by the European Parliament. “A certain industrial policy must be embedded in competition policy,” he stressed, noting that Europe’s traditional competition model no longer aligns with the strategies of major global powers.
The procurement reform comes as the EU grapples with broader economic challenges, including a housing crisis and the need to bolster digital sovereignty. European Commission President Ursula von der Leyen had earlier warned of Europe’s vulnerability in critical supply chains, including rare earth elements, where EU trade rebounded in 2025 after a sharp decline the previous year. Imports rose by 17.1% to 15,100 tonnes, while exports grew by 21.1% to 6,700 tonnes, according to Eurostat data.
Meanwhile, the EU’s economic relationship with Türkiye remains a focal point, with European Commissioner Valdis Dombrovskis highlighting the importance of Ankara’s economic reforms and disinflation efforts for regional stability. Speaking in Istanbul, Dombrovskis welcomed Türkiye’s application to join the Single Euro Payments Area (SEPA) and noted that modernizing the EU-Türkiye Customs Union requires unanimous backing from member states. “The Turkish government’s economic reform agenda and disinflation process are certainly important for the resilience of the Turkish economy,” he said.
The procurement reform also reflects broader EU efforts to address strategic dependencies, including in AI regulation. European Central Bank President Christine Lagarde warned this week that AI poses “major risks” to market integrity, citing cybersecurity threats and the rapid pace of technological change. “The means of defense—and the funding required for them—have yet to be found,” she told *Les Échos*.
As the EU prepares to implement these changes, the bloc faces a delicate balancing act: fostering innovation and resilience while avoiding protectionist backlash. Séjourné’s announcement signals a clear shift toward industrial policy as a core EU priority, but the success of the reforms will depend on member states’ willingness to align behind a unified strategy.
With global trade tensions escalating and digital sovereignty becoming a geopolitical imperative, Europe’s latest procurement overhaul could redefine its economic model for decades to come.
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