The European Commission is preparing to tighten access to the EU's public procurement market, according to a draft regulation obtained by Euronews and expected to be presented in September. The proposal would empower public authorities across the bloc to exclude foreign companies that present risks of interference, marking a significant shift in how the Union manages its €2 trillion public procurement market.
The draft document, which reflects heightened geopolitical tensions, specifically targets risks arising from firms whose ownership, control, or financing structures could allow undue influence. It also addresses companies subject to third-country legislation that might compel disclosure of sensitive information or interfere with contract performance. Public buyers would be required to take appropriate measures at every stage of procurement—from planning and market consultation to contract award and execution—to protect the Union's security and public safety interests.
Protectionist Turn or Strategic Necessity?
The proposed regulation would allow, but not mandate, a European preference in public procurement. This could confirm the EU's gradual shift toward a 'Made in Europe' strategy, which the Commission already outlined last March for strategic sectors such as clean technologies, the automotive industry, and energy-intensive industries. Critics argue this marks a protectionist turn, while supporters see it as a necessary response to an increasingly hostile global environment.
Concerns over foreign interference and data transfers have intensified in recent years. Both the United States and China have adopted legislation that allows them to request data stored in the EU from companies under their jurisdiction. The draft regulation explicitly seeks to protect critical infrastructure, supply chains, technologies, and essential services from physical, cyber, or hybrid threats, as well as from harmful strategic dependencies on third-country suppliers.
Several EU member states have already taken unilateral steps. In April, the French government ended its contract with Microsoft to safeguard French health data. In June, Paris replaced US tech company Palantir with French firm ChapsVision for processing sensitive information held by the Directorate General for Internal Security. Over the past few years, Germany, France, Italy, and Denmark have cancelled or denied public contracts to Chinese telecoms giant Huawei over security concerns.
The draft regulation also comes against a backdrop of concrete supply chain vulnerabilities. Last year, China cut off EU exports of rare earth minerals essential for green technologies and defence. It also blocked Dutch-based Nexperia, owned by China's Wingtech, from importing Chinese chips crucial to the EU's car industry. These episodes have underscored the risks of dependency on single suppliers for critical inputs.
The Commission's proposal is part of a broader effort to bolster Europe's economic security. The EU has already introduced the Foreign Subsidies Regulation and the Anti-Coercion Instrument, and is working on the European Defence Industrial Strategy. The new procurement rules would complement these tools by giving public buyers a clear legal basis to exclude risky bidders.
However, the draft stops short of making European preference compulsory, leaving room for member states to balance security concerns with trade obligations. The regulation will need approval from the European Parliament and the Council of the EU, where debates over the balance between openness and protectionism are likely to be intense.
As the EU navigates its relationship with both Washington and Beijing, the proposed rules reflect a growing consensus that the bloc must reduce strategic dependencies without retreating into autarky. The challenge will be to implement these measures in a way that preserves the EU's commitment to open markets while safeguarding its sovereignty.
