Europe's post-war growth model was built on three interdependent pillars. Today, with changes in the international environment, all three pillars are weakening. The first pillar is the continued expansion of global trade. Europe has grown into one of the world's most open economies, roughly twice as open as the United States, and has benefited significantly from globalization. However, this trade expansion is no longer a given. Last year alone, more than 2,500 new trade restrictions were implemented globally. The second pillar is Europe's competitive advantage in mid-range manufacturing, partly due to relatively cheap energy supplies. This advantage is also gradually eroding. China continues to move up the global value chain. Today, nearly 40% of the sectors in the Eurozone where Europe has a comparative advantage face direct competition from China; at the beginning of the 21st century, this figure was only about 25%. The cheap energy sources (including Russian natural gas) that European industry once relied on are also gone. Last year, the average price of electricity for energy-intensive industries in the EU was more than twice that of the United States and about 50% higher than in China. The third pillar is the stable and rules-based global order built on US security guarantees. This environment allowed for deep integration of European supply chains, enabling companies to invest entirely around efficiency without much consideration for supply chain resilience. Currently, this global order is under pressure. Geopolitical conflicts have exacerbated key external dependencies and supply chain bottlenecks, while Europe itself faces increasingly severe security threats. When economic interdependence can be used as a bargaining chip, or when its deterrent effect diminishes, businesses will directly prioritize resilience in their economic decisions. Once capital is deemed less secure, businesses will reduce their willingness to invest, thereby dragging down output and consumption. In summary, these multiple shifts indicate that Europe's post-war growth model is gradually disintegrating, and the original model is difficult to replicate. However, Europe still possesses strong fundamental advantages to leverage. Despite increasingly headwinds in the trade environment, the EU boasts the world's largest network of free trade agreements, and this network continues to expand: recently, the EU has completed or is advancing negotiations on several free trade agreements with partners such as India, Indonesia, Australia, Mexico, and Mercosur. At the domestic level, Europe maintains world-class manufacturing capabilities, leading globally in fields such as lithography and precision optics, and possesses a highly skilled workforce. For example, 35% of German undergraduate graduates study science, technology, engineering, and mathematics (STEM) related fields, the highest percentage among OECD member countries. Crucially, Europe boasts an integrated market spanning 27 member states and 450 million consumers, making it the largest single market among developed economies. As the growth drivers shift, the value of this large domestic market is becoming increasingly apparent. Last year, the Eurozone economy grew by 1.5%, driven entirely by domestic demand. Even with energy shocks, the economy is expected to continue growing in 2026; the second quarter of 2026 is projected to see a 0.4% quarter-on-quarter growth rate, with domestic demand contributing positively to growth. Domestic demand is expected to remain the primary driver of Eurozone economic growth this year. The core task now is to transform short-term resilience in domestic demand into long-term sustainable growth momentum. This requires Europe to better leverage the scale effect of its large domestic market. If companies can expand their operations throughout the EU, investment efficiency will improve, innovation capabilities will be further unleashed, and ultimately, productivity will increase. New technologies are reshaping the sources of productivity growth, making market size particularly important in this context. In some respects, Europe possesses the foundation to seize new technological opportunities: it has world-class research and knowledge reserves. While the EU's population accounts for only about 6% of the global population, its number of researchers reaches 15%, and its output of highly cited scientific papers is close to one-fifth of the global total. The real challenge lies in translating scientific research results into commercial success and promoting the widespread adoption of new technologies across the entire economy. Barriers that hinder businesses from growing and becoming stronger often also restrict the popularization of technology. We have already witnessed this lesson. During the first digital revolution, Europe largely missed out on the development dividends, with a large portion of the commercial benefits from the widespread adoption of information and communication technologies flowing to other regions. Facing the second digital revolution—artificial intelligence—Europe cannot repeat the same mistakes. Currently, there are positive signs that European companies are investing in artificial intelligence. Survey data shows that Eurozone companies expect to allocate an average of about 9% of their total investment to artificial intelligence this year. The core issue is whether Europe can create a favorable environment for the continued diffusion of AI-related investments and the continued expansion of the industry. Two major barriers are particularly prominent: First, there is fragmentation within the single market. Competition among companies is mostly confined to national borders, weakening the competitive pressure on companies to adopt new technologies. Recent research shows that in the Eurozone, if a company perceives a 1 percentage point increase in the proportion of AI investment by its domestic competitors, its own expected AI investment rate will increase by about 0.6 percentage points. However, the research also indicates that this competitive effect is largely limited to national borders. Eliminating internal barriers would allow this competitive incentive effect to extend throughout Europe. Secondly, capital markets are fragmented. European innovative companies typically secure funding in their early stages, but funding gaps become apparent as they expand. Data from the European Investment Bank shows that EU startups and San Francisco startups receive roughly the same amount of funding in their first five years; however, by their tenth year, mature EU tech companies receive about 50% less funding. This fragmented capital market also encourages the outflow of young innovative companies. Approximately 12% of mature EU tech companies have moved out of the EU, with the majority relocating to the United States. These two barriers reinforce each other: market fragmentation reduces the profitability of expansion within Europe, while capital market segmentation makes it difficult for companies to obtain the necessary funding for expansion. The end result is a smaller number of companies that can grow into global giants, and a slower pace of new technology adoption across the economy. Europe is working to address these two challenges: innovating in the construction of a single market and accelerating the integration of capital markets. One highly anticipated solution for the single market is the establishment of the "EU Inc." – an optional, unified EU-wide corporate entity system. Companies would only need to register once to operate across the EU under uniform rules. The goal is to allow startups to establish themselves in Europe from the outset and expand across the continent without having to adapt to differing national regulatory systems. However, the EU Inc. only addresses part of the problem. A more ambitious goal is to remove barriers that fragment the single market, allowing competitive pressures and new technologies to reach existing businesses and achieve wider adoption. Companies capable of expanding across Europe require corresponding cross-regional capital support. This is why Europe is more determined to promote capital market integration. EU leaders are calling on legislatures to reach a consensus on capital market integration by the end of 2026, pushing for a truly unified European capital market. Europe already possesses many favorable conditions for achieving higher long-term growth. Transforming Europe's size advantage into the scale effect of a unified market will help innovative companies establish themselves locally, accelerate the adoption of new technologies, boost productivity, and ultimately make domestic demand a more sustainable growth engine.