Brussels proposes a major reform of public procurement to favor European industry

Brussels proposed on Wednesday a profound reform of public procurement in the EU, aimed in particular at encouraging the use of European or local suppliers, and giving local authorities the option to exclude Chinese companies upfront from their tenders.

The stakes are massive: public procurement represents a 2,000 billion euro windfall per year in the EU (the equivalent of 15% of its Gross Domestic Product). Out of this total, around 600 billion euros in public contracts are put out to tender each year at the European level. This is the equivalent of the post-Covid European recovery plan, or "4 or 5 times the annual European budget," emphasized Stéphane Séjourné, Commission Vice-President for Industry and the Single Market, to journalists.

"It is a lever for action and a strategic lever today, where China, India, the United States, and all the major powers also use this lever for their industrial and economic strategy," he argued. The reform aims first of all to simplify procedures for businesses and local authorities by reducing public procurement regulations from "900 pages to 200," and by creating a new European platform dedicated to tenders.

Above all, if this reform is approved by the 27 member states and MEPs, public buyers will also have to include, in principle, a minimum proportion of 30% of criteria other than price in their procedures. This will allow them, if they wish, to favor a form of European or local "preference," for example by imposing social, environmental, or quality requirements.

Local authorities will also be able to choose to exclude upfront companies from countries that do not offer reciprocal access to their public procurement markets. This option would de facto eliminate Chinese companies from a portion of European tenders, amid trade tensions between Brussels and Beijing. From now on, it will not be Brussels' fault if, in the future, "people prefer (to buy) Chinese buses over European buses, since today we are giving public buyers the capacity to prefer European buses," Mr. Séjourné assured.