EBM Newsdesk Analysis
May 12, 2026 — Philippe Aghion, who shared the 2025 Nobel Prize in Economics for his work on innovation and growth, has used his most explicit intervention since winning the award to argue that the EU should stop trying to coordinate 27 member states and instead build a willing “core” of like-minded countries — including Canada and possibly Singapore — to compete with the United States and China. “We should have a core set of countries… who embrace common values,” Aghion said. “And then the core can decide to make deals with the US, with China, with others. But we are the centre.” It is the bluntest formulation yet of what Mario Draghi’s €800bn competitiveness report only implied: that consensus has become Europe’s principal economic handicap.
The intervention lands at the precise moment when the EU Inc proposals to harmonise corporate law are stalling on tax and regulatory questions, German industrial output is collapsing, and Trump’s tariffs are testing whether the bloc can act with anything resembling speed. Aghion’s argument is not that Europe should give up on the 27 — it is that Europe should give up on requiring all 27 before doing anything.
A multi-speed Europe in everything but name
What Aghion is describing is a multi-speed Europe: the long-feared and quietly inevitable answer to a bloc that takes years to do what Washington can do in hours. The “core” model already exists informally. France, Germany, the Nordics, the Benelux nations and Ireland coordinate on a dozen issues without waiting for Hungary or Slovakia to agree. Aghion’s proposal is to formalise the practice and extend it beyond EU borders.
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SubscribeThe intellectual lineage is direct. Aghion’s Nobel work, shared with Peter Howitt, established that growth in mature economies depends on innovation — and innovation depends on capital deep enough and policy stable enough to underwrite very long-horizon bets. Neither condition holds at the EU-27 level. They could at the level of a deliberately smaller group with shared institutions.
Why Canada and Singapore
The choice of partners is deliberate. Canada is a G7 democracy, a substantial commodities and AI producer, and one of the few major economies the Trump administration has actively antagonised — a useful selling point for a Europe trying to build alliances rather than tribute relationships. Singapore offers what Europe most conspicuously lacks: a sovereign financial centre operating at the speed and scale of Hong Kong, plus deep AI and biotech infrastructure.
For European corporates the implication is concrete. A “core plus Canada plus Singapore” bloc would be the world’s third-largest research ecosystem after the US and China combined, with roughly $410 billion in annual R&D spending. The capital markets implications are larger still: the European Capital Markets Union has been blocked for a decade by exactly the consensus problem Aghion is trying to solve. A smaller, willing coalition could deliver it in a parliamentary cycle, not a generation.
The Draghi inheritance, made explicit
What Draghi argued in elliptical terms in his 2024 report — that Europe is structurally falling behind on AI, biotech, defence tech and capital markets depth — Aghion is now saying in plain language. The two interventions read as the same critique from different sides of the academic establishment. Both diagnose Europe’s productivity gap as a coordination failure rather than a capital one. Both stop short of explicitly endorsing a two-tier EU. Aghion has gone further than Draghi felt able to.
The opposing forces are real. Poland, Hungary and Italy have signalled resistance to anything that looks like a formal two-speed Europe. France quietly favours it. Germany is internally divided. Brussels has historically swerved away from the language altogether.
What this means for the next two years
The next test is the EU’s June Council, where competitiveness, defence and tech sovereignty all sit on the same agenda. Aghion’s framing gives the Commission rhetorical cover to push a smaller-group approach openly, rather than continuing to brand multi-speed coordination as a temporary workaround. The alternative, on Aghion’s reading, is structural decline that no individual reform can reverse.
Europe’s Nobel laureates do not normally do politics. That this one has, and this directly, is the news.
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