Reinventing Competitiveness in Europe’s Age of Polycrisis

This paper analyses how “competitiveness” operates as a malleable political repertoire in EU economic governance. Drawing on Nicolas Jabko’s conceptualisation of ambiguous policy frameworks (2006), it argues that competitiveness has functioned less as a fixed economic doctrine than as a shapeshifting container for evolving policy priorities, crisis responses, and changing ideas of what constitutes a “good” economy. During the eurozone crisis, competitiveness was narrowly defined through unit labour costs, welfare retrenchment, and firm-level efficiency, legitimising internal devaluation and export-led growth. Yet as the austerity consensus crumbled under its failure to generate sustained investment, productivity growth, and quality employment, competitiveness gradually receded from the centre of EU economic discourse. In its place, public institutions, and not labour markets, became the primary focus of European reform agendas. This shift reflects the broader ascent of institutional economics and a growing recognition that resilient public institutions, rather than cost compression, underpin long-term prosperity under conditions of polycrisis. Recent geopolitical shocks, supply-chain vulnerabilities, and technological competition have once again reactivated competitiveness as a central political objective. The Letta and Draghi reports epitomise this renewed attempt to redefine European competitiveness in an age of fragmentation. Based on elite interviews with Brussels-based trade chambers and industry associations, the paper shows that competitiveness has re-emerged as an “empty shell” contested by rival coalitions. While unit labour costs are no longer the primary battlefield, business actors emphasise market integration and regulatory simplification, whereas public-interest institutions mobilise competitiveness to justify industrial policy, digital transition spending, strategic protection, and investment in frontier technologies. The paper argues that ambiguity is not a weakness, but rather the very source of competitiveness' conceptual appeal: it enables coalition-building across conflicting interests while obscuring the distributive stakes embedded in Europe’s new growth strategies.