TAE: Yes to a smart ‘European preference’ – no to tokenism and protectionism
The European Taxpayers’ Association (TAE) welcomes the debate on strengthening Europe’s industrial resilience and competitiveness. This discussion has gained momentum recently, partly due to the latest policy initiatives from EU Commissioner Stéphane Séjourné, who advocates for a “European preference” and a “Made in Europe” approach in public funding and public procurement.
Europe must be able to effectively counter unfair competition, competition-distorting foreign subsidies and strategic dependencies. In this context, strengthening European value chains through targeted demand-side instruments is legitimate and potentially useful.
At the same time, the TAE emphasises that Europe must build its economic strength not on protectionism, but on competitiveness: smart regulation, cutting red tape, high-quality education and skills, world-leading research, and an enabling environment that allows start-ups to grow into global champions and unicorns – supported by strong and dynamic SMEs across Europe.
A European preference mechanism, as currently being discussed by Commissioner Stéphane Séjourné, must therefore be designed with a clear objective and due care: strong enough to protect Europe from unfair practices, but at the same time intelligent enough to avoid unintended side effects. This applies in particular to rising costs, restricted competition and the risk of escalating trade retaliation.
The TAE supports a pragmatic approach based on four guiding principles:
1) Preserving open trade – no spiral of protectionism.
Europe’s prosperity depends on global markets, reliable partnerships and export capacity. A European preference must not be misinterpreted as a signal of general economic isolation. It should be targeted, proportionate and compatible with Europe’s international commitments in order to prevent retaliatory measures that would ultimately harm European businesses, consumers and taxpayers.
2) Protecting fair tendering, competition and market discipline:
Public procurement is funded by taxpayers and must remain competitive, transparent and results-oriented. Criteria such as ‘Made in Europe’ must not undermine fair procurement procedures, reduce the diversity of suppliers or effectively create protected markets. Competition is not a mere formality – it is the strongest safeguard for taxpayers against inflated prices, poor performance and rent-seeking (profit maximisation without creating value).
3) SMEs must benefit – not be burdened.
Europe’s SMEs are indispensable suppliers and key drivers of innovation. Preferential mechanisms must not become bureaucratic instruments that only large, established companies can master. If they are introduced, they must ensure the following:
- simplified participation and reduced bureaucracy
- procurement processes that enable SMEs to be competitive (e.g. random selection, proportionate requirements)
- clear, practical definitions and reliable procedures
- Safeguards against circumvention, corruption and cartel-like effects
4) Anticipating unintended consequences – focus on measurable results.
The TAE emphasises that poorly designed preference rules can have unintended consequences, including higher procurement costs, slower implementation, weaker incentives for innovation and distortions in the internal market due to differing national interpretations. A European preference must therefore include the following:
- transparent cost and life-cycle analyses
- measurable performance and impact criteria
- independent evaluation and review
- sunset clauses in the event that the objectives are not met
The TAE supports a European competition strategy that strengthens strategic capabilities and counteracts unfair competition. However, it must not be allowed to degenerate into a purely symbolic instrument with limited impact. European taxpayers need concrete results – not tokenism.
Innovation, investment, skills, excellent research and favourable conditions for SMEs and start-ups will help Europe succeed – supported by a public procurement system that generates added value, strengthens resilience and preserves Europe’s open and competitive economic model.
Brussels/Munich, 6 February 2026