By Alix Poncet & Arthur Descazeaud.

This article is based on public statements made during the conferences held at the 2025 Rencontres Économiques in Aix-en-Provence, that both the authors attended. 

As the Rencontres Économiques d’Aix-en-Provence marked their 25th anniversary this July, the event unfolded against the backdrop of what organisers have termed a “collision of realities”, meaning an accumulation of systemic shocks shaking the foundations of the post-war global order.

As Jean-Hervé Lorenzi, President of the Rencontres, asserted: “We are not experiencing a succession of isolated crises, but a deep and lasting transformation of our economic and political environment.” As Europe is faced with demographic decline, growing debt, stalled productivity, and intensifying climate risk, this year’s theme “Facing the Shock of Realities” set the tone for three days. 

Over 400 speakers, including heads of government, central bankers, business leaders and Nobel laureates, gathered in Aix-en-Provence. They did not only exchange diagnoses but debated sovereignty –  economic, technological, ecological and strategic –  as a prism through which to reassess Europe’s place in a fractured world. 

This review analyses the key insights and tensions emerging from Aix, structured around four interconnected dimensions of sovereignty: economic and financial resilience, technological autonomy, ecological transition, and strategic defence. What emerged was not a singular vision, but rather a contested and multi-layered conversation about power, interdependence, and responsibility in an age of volatility. 

Competitiveness: China, Trump, and the Return of Economic Warfare 

Europe’s industrial competitiveness is in strategic decline. Across the Rencontres Économiques d’Aix and key policy papers, voices such as Mario Draghi, Enrico Letta, and François Villeroy de Galhau converged around a diagnosis: the continent is too slow, too divided, and dangerously exposed to systemic external pressures. 

Draghi warns of a “silent retreat” of European economic clout, urging a complete overhaul of the EU’s competition doctrine. Letta similarly laments Europe’s diminishing weight, as it becomes “a museum of past industrial revolutions.” Alongside the Draghi report, which has become a central reference point for calls to reinvigorate Europe’s economic strategy, Giuliano da Empoli’s L’Heure des prédateurs has been repeatedly cited as a crucial intellectual lens. In this work, da Empoli portrays Europe as a passive actor, drifting in a world dominated by strategic predators. He highlights how authoritarian capitalism in China and corporate-military complexes in the United States wield capital, data, and regulation as tools of geopolitical power. “The new empires are not built with armies but with algorithms and investments,” he writes.

Éric Lombard, Minister of the Economy, captured the stakes with a stark metaphor: “Imagine a playground. Children are playing hopscotch, tag, marbles. Then three bullies arrive – the United States, China, and Russia – who refuse to follow the rules and impose their own.” His diagnosis: the global economic game has become unstable, unpredictable, and increasingly hostile.

The direct threats are now fully named. China is described by Nicolas Dufourcq (CEO of Bpifrance) as “an industrial empire in war mode,” engaged in aggressive monetary policy and industrial dumping. The European Commission’s procedural sluggishness in responding to anti-dumping cases has left entire sectors vulnerable, particularly SMEs. 

Trump’s America is no longer a partner but an economic adversary. As Villeroy stated in Aix: “Trump’s protectionism is adverse, but it’s a wake-up call. Europe must move from dependence to sovereignty.” 

Market Integration: Strategic Unity or Fragmentation? 

The Single Market remains Europe’s greatest unrealised asset. While it matches the United States in GDP on a PPP basis (€17.9tn vs €18.4tn), it fails to operate as a cohesive economic engine. Letta identifies institutional fragmentation as a core barrier, calling for the creation of a “28th virtual Member State”, with harmonised business rules to facilitate pan-European operations. 

Draghi reinforces the urgency of transcending consensus-based inertia. He advocates for a coalition of the willing, akin to Schengen or the Eurozone, to advance integration in strategic sectors. 

Villeroy elevates the argument: “We must do with economic and financial sovereignty what we achieved 25 years ago with monetary sovereignty.” His call for a target date “1 January 2028” aims to emulate Delors’ “1993 moment” for the Single Market, making integration irreversible and politically binding. 

Savings and Investment: From Dormancy to Strategic Allocation 

Europe’s financial structure is the Achilles’ heel of its sovereignty. Despite €35 trillion in private savings, this capital is largely passive or exits the continent. Camille Beudin (Euronext) highlights that over €300 billion per year is invested in US markets, often via passive funds or debt instruments. 

Letta’s report, together with Villeroy’s vision of a Union for Savings and Investment, confronts this structural weakness. The aim: redirect this dormant capital into venture financing, equity, and strategic infrastructure. Nicolas Calcoen (Amundi) criticises the fiscal architecture that “incentivises capital preservation rather than productive investment.” The preference for life insurance, real estate, or monetary funds over equity remains deeply entrenched. 

Debt and Fiscal Orthodoxy: The End of Illusions 

The time of illusions is over. France, with a public deficit forecasted at 5.4% in 2025, is preparing its most severe fiscal adjustment since 1983. Nicolas Dufourcq warns of an inevitable “cycle of austerity over the next four years,” arguing that €150 billion in expenditure reduction is necessary to stabilise the debt trajectory. 

He deconstructs the widely held belief that France has endured a continuous crisis without implementing real austerity: “We’ve never actually done austerity since 1983. That illusion ends now.”

In a more moderate tone, Villeroy de Galhau links fiscal consolidation to Europe’s strategic credibility. “France must reduce deficits if it is to lead the European project.” His analysis supports targeted cuts, especially in local and social expenditure, while preserving investment and innovation budgets. 

This view aligns with Draghi’s position: the fiscal space must be created not for orthodoxy’s sake, but to finance the European commons – defence, energy, and digital sovereignty. 

Éric Lombard, France’s newly appointed Minister of the Economy, echoed this imperative in: “Restoring public finances is our first priority – without it, we cannot make our own choices.” His stance anchors the coming budget not as an exercise in austerity, but as the first step in what he calls France’s “economic rearmament”.

Technology: A Colony in the Making 

Perhaps the most alarming diagnosis emerges around technological dependence. Letta and da Empoli are the most explicit: Europe risks becoming a technological colony of the US and an industrial colony of China. The asymmetry is staggering: 800 unicorns in the US, only 150 in Europe; dominant cloud infrastructure (AWS, Azure) and payment networks (Visa, Mastercard) are American. 

Da Empoli stresses that technology is no longer a neutral space – it is a strategic battlefield, where platforms, patents, and chips are the new terrain of domination. In his words: “Europe’s refusal to play the game does not exempt it from being played.” 

Draghi urges massive co-investment and shared financing mechanisms to scale up deep tech, AI, and semiconductor industries. Villeroy, on his side, advocates for the digital euro as a sovereign countermeasure to private stablecoins and dollarised crypto-assets: “Without monetary sovereignty in the digital world, political sovereignty will be an illusion.” 

All actors stress the urgency of transforming strategic sectors – from cloud to quantum – into European scale-ups, shielded from predatory acquisitions and underpinned by patient capital.  

Defence: From Strategic Awakening to Industrial Coordination 

The war in Ukraine, the wavering commitment of the United States, and the rising cost of geopolitical fragmentation have triggered a long-overdue strategic awakening in Europe. Defence, once outsourced to NATO and American guarantees, is now being reframed as a central pillar of European sovereignty. French Minister of the Armed Forces Sébastien Lecornu and economist Laurence Boone led powerful interventions in Aix, arguing that Europe must not only spend more, but spend better, and spend together. 

If the European Union decided to build a truly integrated army, it would rank among the largest in the world with its 1.4 million personnel. Yet today, Europe remains strategically weak due to fragmentation: only 20% of defence procurement is coordinated at the EU level, and 80% of military equipment is imported from outside Europe. As Lecornu bluntly noted, the EU is “producing like the U.S., but exporting half, with duplications and critical capability gaps.”

While most EU countries are moving toward defence spending of 5% of GDP, the absence of coordination risks exacerbating import dependence and market tensions. The EU’s flagship initiative, RearmEU, proposes €800 billion in defence investments, but lacks conditionality to incentivise European purchases and joint procurement. 

France’s position is rooted in its historical autonomy: the only EU member with full nuclear capabilities outside NATO command, it has long built a full-spectrum army. Lecornu underlines the political price of past underinvestment: basic capabilities like ammunition or small calibres have been outsourced, making strategic ramp-up difficult. 

Yet, the French BITD (Base industrielle et technologique de défense) is unique, with over 4,500 SMEs and a sovereign command of the nuclear and conventional spectrum. But as Emmanuel Chiva of the Direction Générale de l’Armement (DGA) stressed, “France can do everything, but not at the scale we need.” Hence, Europe must embrace licensed production, specialisation, and leadership by the most capable players. 

The EU is finally converging towards common goals, but diverges on means. While Lecornu distrusts European Commission-led defence coordination, he advocates multilateral agreements among willing states, including strategic non-EU partners like India or the UAE. Florence Parly and Thierry Breton echoed this pragmatism: sovereignty will come from collaborative industrial ecosystems, not top-down harmonisation. 

Four priority sectors for joint European industrial effort emerged from the debate: air defence (currently 90% American), drones, space, and electronic warfare. EU programmes like ASAP (focused on ammunition co-production) are seen as scalable models. As Breton noted, “We multiplied artillery shell production from 600,000 to 2.5 million per year in under 18 months through coordinated co-investment.” 

Strategic sovereignty must also be conceptual: from anticipating critical dependencies to mapping industrial value chains. This is not about replacing NATO, but ensuring credible European deterrence in a world where US disengagement is plausible and Russian threat is real. 

Energy: Security Through Integration and Diversification 

Energy is no longer a technocratic issue. Since the Russian invasion of Ukraine, it has become a geopolitical fault line and a sovereignty test. Europe, deeply dependent on oil and gas imports, is seeking to reinvent its energy model through diversification, electrification, and industrial relocalisation. 

Orano CEO Nicolas Maes argued that nuclear energy epitomises this shift. Beyond reactors, sovereignty lies in mastering the full fuel cycle – from uranium extraction to enrichment and waste treatment. France, through Orano, is one of the only countries controlling this entire chain. The only comparable actor? Russia. Even the U.S. lacks full capacity. 

Electrification is another core pillar. Xavier Piechczyk of RTE outlined three fronts of energy sovereignty: materials (e.g. metals for grid equipment), technological autonomy (understanding and controlling deployed systems), and manufacturing localisation. Europe must build grids that are not just green, but European. 

Valérie Mignon reminded the audience that even renewable energy is not inherently sovereign. Solar panels, wind turbines, and battery storage depend on critical raw materials like cobalt and lithium, sourced and processed outside the EU. Thus, energy independence requires not just green deployment, but control over supply chains, infrastructure, and technology. 

TotalEnergies CEO Patrick Pouyanné was blunt: Europe will never match U.S. energy prices due to its resource constraints. However, sovereignty and competitiveness can be reconciled if Europe “plays collectively”: produces everything it can (nuclear, renewables), integrates infrastructure across borders, and tailors policies to strategic sectors. A striking example of Europe’s fragmentation is that connecting solar farms from a cybersecurity standpoint requires interpreting one directive through 27 different national texts – whereas in the U.S., a single unified rule means companies only need one expert, not 27, making the American market far more attractive. 

A new European energy model would resemble an updated CECA – a community of shared resources and industrial coordination. Germany may for instance focus on wind, France on nuclear, but what matters is grid interconnection, joint investment, and a clear division of industrial labour. 

Industry and Strategic Competitiveness: The New Pact 

Europe’s industrial future hangs in the balance. Faced with deindustrialisation, an energy cost disadvantage, and global protectionism, voices in Aix called for a new strategic pact: to defend not only green champions and deep tech, but also legacy industries that form the bedrock of the EU economy. 

Saint-Gobain CEO Benoit Bazin pointed to energy efficiency as a key driver of competitiveness, especially in energy-intensive sectors. The Draghi report highlights cutting-edge technologies, but Bazin warned against neglecting Europe’s foundational value chains. 

Patrick Pouyanné echoed this view. Europe was built for low inflation and consumer protection, not for industrial competition. This resulted in rigid antitrust rules and a fragmented market. The outcome? No European tech giants, and heavy dependence on American cloud and platforms. 

If Europe wants to re-industrialise, it must move beyond idealised competition and invest in its productive capacity. This includes accepting targeted subsidies, allowing industrial consolidation, and treating critical sectors as strategic assets. 

A recurring proposal was a “Buy European Act” to prioritise EU-made products in green and industrial procurement. Complemented by tariffs, CSR conditionality, and simplified rules for scale-ups, this industrial policy could revive Europe’s dormant supply chains. 

For Thomas Buberl (AXA) and Clare Woodman (Morgan Stanley), capital is not the issue. European savings abound. What’s missing is risk appetite, financial integration, and a single capital market. This financial fragmentation hinders investment in industrial scale and innovation. 

In the words of Pouyanné, the real world is not made of reports, but of investments. Europe must stop being the world’s most refined regulator and become a bold builder again. 

Each summer, the Aix forum asserts itself as a key space for shaping French and European economic thought. Under the leadership of Jean-Hervé Lorenzi, it now carries an increasingly international and European dimension. This year, it highlighted how the global environment serves not only as a source of pressure, but as a powerful wake-up call for greater European cohesion. In a world marked by fragmentation and strategic rivalry, sovereignty and collective leadership are no longer ambitions – they are necessities. As Mario Draghi urged in Aix-en-Provence: “Fight, fight & hope!”

Edited by Justine Dukmedjian.

References

[1] Everything is based on different conferences organised at the Rencontres Économiques d’Aix-en-Provence 2025.

[Cover Image] Photo by Alix Poncet.