European Commission proposes ‘Buy European’ overhaul of public procurement

Europe turns public spending into industrial policy

The European Commission has proposed a broad overhaul of the European Union's public-procurement system that would encourage governments, schools, hospitals and other public bodies to purchase more European goods and services. The September 9 draft does not impose a general binding quota for locally made products. Instead, it expands the legal tools available to buyers and directs them to consider quality, sustainability and supply-chain resilience alongside price.

Under the proposal, quality would normally carry at least a 30 percent weighting in contract-award criteria, with authorities required to explain a decision not to use that benchmark. Labour-intensive contracts would face a higher minimum quality weighting of 50 percent. The Commission argues that public bodies have too often interpreted existing rules as requiring the cheapest bid, even when a different offer might provide greater long-term value or strengthen European production.

Reciprocity and competition with China

The draft would also clarify when European buyers may restrict or reject bids from countries that lack a procurement agreement with the EU or do not offer reciprocal access. China is not part of the World Trade Organization's plurilateral Government Procurement Agreement, making Chinese participation a central political concern. Brussels has separately used its foreign-subsidy powers against Chinese companies where it believes state support has distorted competition in European infrastructure markets.

The Commission's earlier evaluation found that the 2014 procurement directives had improved transparency but had not delivered sufficient legal clarity or flexibility. It also found declining average bidder numbers, uneven use of environmental and social criteria, and growing concern about third-country participation. Public procurement represents roughly 15 percent of EU gross domestic product, giving even non-quota preferences potentially significant consequences for transport, healthcare, energy and construction supply chains.

Negotiations now move to lawmakers and governments

The proposal will not take effect immediately. It must be negotiated with the European Parliament and member-state ministers, and its thresholds, exceptions and weighting rules may change. Governments with close trade links outside the bloc will examine whether the preference provisions are compatible with existing agreements, while industries will argue over what qualifies as European production. The key test will be whether the final law strengthens resilience and quality without reducing competition, raising costs excessively or fragmenting the EU single market.