Urgent Call for Change as European Business Leaders Lose Optimism

A recent study by the Boston Consulting Group (BCG) emphasizes a worrying trend among business leaders in Europe, revealing that a staggering 96% believe that immediate actions are necessary to protect the continent's economic interests. This survey reflects a growing unease as optimism among executives has diminished by 15% since Liberation Day in early April 2025.

Overwhelmingly, both business leaders and citizens recognize that Europe cannot continue along its current path; 85% of Europeans share their leaders' views that significant reforms are critical to avoid severe long-term consequences. Matthias Tauber, Head of BCG in Europe, stated, "Europe can no longer afford to debate whether it has a competitiveness problem—leaders and citizens agree the time for radical change is now."

A Unified Demand for Change

The report highlights a broad consensus for a radical resetting of European policies and practices. Over 60% of both citizens and executives advocate for a stronger collaboration among EU member states rather than a retreat into isolationism. Many acknowledge that increased cooperation is essential to bolster competitiveness, especially in sectors like energy, defense, and technology.

One of the most alarming statistics from the study reveals that 80% of respondents see the necessity for radical change to restore Europe's competitive edge. As many as 85% of business leaders signal that the EU has hit an institutional dead end, urging for a concentrated reform effort led by a coalition of forward-thinking countries.

Geographical Sentiment Variations

Interestingly, the report also highlights sentiments diverging across different European nations. While optimism is particularly high among Italian business leaders—who reported a 81% confidence level—confidence is lower in traditionally strong nations like France and Germany. Here, only 27% of French citizens and 29% of Germans expressed hope regarding Europe's competitiveness. CEO sentiments reflect this cautious outlook, with optimism at 61% in France and 60% in Germany.

Despite these national variances, there is still widespread support for deeper European cooperation. A notable 87% of business leaders called for reduced tax pressures, alongside demands for modified labor laws and simplified regulations to encourage investment and innovation.

Strategic Priorities for Change

As a part of their call for action, business executives across the continent have underscored five critical areas requiring immediate attention:

1. Technology Innovation: There's a need to foster new technologies with strong backing for fiscal incentives, including the establishment of a European agency focused on high-risk innovations, akin to the US DARPA.

2. Energy Diversification: Leaders advocate a varied, decarbonized energy approach that elevates nuclear power's role, advances electrification, and creates an integrated European energy grid.

3. Investment Reforms: A harmonization of banking regulations and capital market integration is critical to scale Europe’s venture ecosystem and support innovation.

4. Defense Cooperation: With defense viewed as a key industrial pillar, executives recommend enhanced cooperation among European nations to achieve greater scale and resilience in defense sectors.

5. Supply Chain Sovereignty: Emphasizing European independence, leaders support local industries to decrease reliance on external suppliers in essential markets.

The Role of Business Leaders

Perhaps most strikingly, the report indicates a strong inclination among citizens to see business leaders engage actively in shaping economic policy. A significant 93% of executives and 76% of citizens want CEOs to assume a more public role in addressing economic issues. However, challenges remain, with potential reputational risks often holding leaders back from speaking out.

"Europe’s business leaders are not asking for permission—they are asking for a platform," remarked Sylvain Duranton, Global Leader of BCG X. This sentiment signals a critical turning point. With the right environment for action, European companies can pave the way for transformative change.

For further details, the complete publication is available here.