“Buy European” is coming. On 4 March, the European Commission has released its Industrial Accelerator Act, which aims to favour European firms in publicly funded projects across strategic sectors. The objective is clear: boosting European competitiveness by creating demand for domestic firms and ensuring digital sovereignty by reducing reliance on non-European suppliers.

In turbulent geopolitical times, the proposal is politically tempting. Europe lags behind the United States and China, both of which operate their own buy-local regimes. If they do it, Europe should do the same. The logic appears straightforward.

It is also economically flawed.

Awarding contracts based on origin rather than merit risks depriving Europe of world-class innovation. Europe’s openness has long been a strength. By keeping its market open, it has attracted leading global firms, which have created local jobs, invested in infrastructure, and delivered innovative products and services to European businesses and citizens. This is free trade at its best: openness that raises standards and fuels competition.

Yet openness comes with a cost: dependency.

The Commission has identified strategic dependencies in sectors such as batteries, active pharmaceutical ingredients, clean hydrogen, semiconductors, and cloud and edge technologies. In a perfectly functioning, rules-based international order, such dependency would not be problematic. Countries specialise in what they do best and trade for the rest — the logic of David Ricardo’s theory of comparative advantage.

But the international order is no longer perfectly functioning.

In this environment, dependencies create vulnerabilities. External shocks, such as the COVID-19 crisis, expose the European economy to access restrictions on critical inputs. Following the pandemic, European leaders launched “de-risking” strategies. The European Chips Act, designed to strengthen Europe’s semiconductor capacity after a global shortage, is a clear example of such a strategy.

More recently, vulnerabilities stem not only from shocks but from deliberate foreign policies. At the World Economic Forum in Davos, Canadian Prime Minister Mark Carney described the rupture of the rules-based order in stark terms: “[…] great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.”

In such a world, “strategic autonomy” becomes politically irresistible in view of greater independence. In this context, “Buy European” is framed not as protectionism against others but as protection for Europe itself.

Yet there is a better alternative: “Build with Europe.”

Europe can transform dependency into interdependency. Rather than excluding non-European firms, Europe can incentivise partnerships that leverage foreign expertise while anchoring value creation locally. This is a win-win strategy that supports both competitiveness and digital sovereignty.

Artificial intelligence illustrates how this approach could work.

AI rests on three main pillars: cloud infrastructure for developing and deploying models and applications, data for training them, and energy to power the systems. Each layer offers Europe an opportunity to maximise its comparative advantage.

Cloud infrastructure is largely dominated by non-European hyperscalers. Rather than shutting them out from public projects, Europe could encourage structured partnerships between global providers and local firms. Hyperscalers could provide advanced infrastructure and services, while European cloud providers host sensitive data and applications locally, closer to users. This would stimulate domestic demand and create local employment across the value chain, from construction workers to engineers, to build data centres in Europe.

Data is another strategic asset. Europe holds rich industrial and public datasets, particularly in sectors where it excels, such as automotive and healthcare. Leveraging these datasets to develop AI models and applications in collaboration with global firms would generate innovative products and services, thereby strengthening European industries and giving them a competitive edge.

Finally, Europe possesses significant low-carbon energy resources, including nuclear power in Member States, such as France. Powering data centres with reliable, low-carbon energy would not only enhance data centre sustainability but also boost energy demand.

“Build with Europe” is therefore “Buy European”, enhanced with openness. It is not about excluding the world’s best innovators, but about structuring cooperation so that value, skills, and infrastructure are anchored in Europe.

Europe already has much of the regulatory framework and many of the strategic assets required to implement this approach. What it needs is speed, coordination, and clarity of purpose between global and local actors.

If Europe confuses sovereignty with isolation, it risks weakening its own competitiveness. If it instead builds with the world on European terms, it can strengthen both. That is the real path to European competitiveness and digital sovereignty.