The debate surrounding the proposed EU Inc. Regulation has rapidly become one of the most vibrant discussions in European corporate law. Much of the attention has focused on the substance of the proposal: digital incorporation, simplified governance, employee stock options, modern financing instruments, and the broader ambition of creating a genuinely European corporate vehicle for innovative firms.

Recently, however, attention has shifted to a different question. In a thoughtful contribution, members of the European Company Law Experts (ECLE) group argue that the proposal rests on shaky constitutional foundations. Other commentators have made a similar point. Their concern is not primarily with the policy merits of EU Inc. but with its legal basis, particularly the Commission’s reliance on Article 114 TFEU. According to the authors, the proposal walks a narrow constitutional ridge between Article 50 TFEU, which concerns the coordination of company law, and Article 352 TFEU, the traditional basis for supranational corporate forms such as the SE and SCE.

These concerns deserve serious consideration. Yet they also risk obscuring a more fundamental reality: the success or failure of EU Inc. will ultimately depend far less on the precise legal basis than on whether there is sufficient political determination to create it. The history of European integration suggests that constitutional questions matter greatly – but rarely in a way legal scholars imagine. When political consensus exists, institutional and legal solutions usually follow. When political consensus is absent, even the most perfect legal basis proves insufficient.

The constitutional debate therefore risks putting the cart before the horse.

Political Will Has Always Driven European Integration

European lawyers often speak as though Treaty provisions mechanically determine the trajectory of integration. The historical record suggests the opposite. Many of the European Union’s most consequential innovations emerged in situations where legal authority was contested, uncertain, or even apparently absent.

The Economic and Monetary Union provides perhaps the clearest example. The introduction of the Euro represented one of the most ambitious transfers of sovereignty in modern history. Throughout the Maastricht negotiations, scholars debated whether monetary union was economically sustainable, constitutionally coherent, or institutionally complete. Yet, political leaders concluded that monetary integration was necessary for the future of European integration and proceeded despite unresolved constitutional and economic concerns.

The same pattern emerged during the eurozone crisis. Faced with existential threats to the single currency, EU institutions repeatedly adopted innovative legal arrangements whose compatibility with existing Treaty structures was hotly contested. The European Stability Mechanism, the Fiscal Compact, and the ECB’s unconventional interventions all generated intense constitutional debate. Yet the overriding political objective – preserving the euro – ensured that legal solutions were found. In the face of a financial crisis, regulators and supervisors have always put economic necessities over formal legal problems. As The Economist put it in 2016, “Given a choice between financial stability and the rule book, ditch the rule book”.

The Court of Justice has played its part. In cases such as Pringle, Gauweiler, and Weiss, the Court demonstrated considerable sensitivity to the broader political and systemic stakes involved. It did not abandon legal reasoning. But neither did it approach the Treaties as a rigid framework incapable of accommodating new political realities. It frequently barked, but never bit – setting limits, but ultimately providing lawmakers with the necessary flexibility of pursuing even unusual and innovative legal projects.

The lesson is not that law does not matter. Rather, it is that constitutional interpretation in the EU has always occurred within a broader political context. Major integration projects succeed when they are perceived as necessary for the functioning of the Union.

EU Inc. increasingly belongs in that category.

The Strategic Context Has Changed

Much of the constitutional discussion treats EU Inc. as a relatively normal company-law initiative. That characterization may have been plausible several years ago. It is increasingly implausible today.

The proposal arrives at a moment when European policymakers are deeply concerned about the continent’s declining competitiveness, chronic under-scaling of innovative firms, fragmented capital markets, and dependence on non-European technology ecosystems.

The 2024 reports produced by Mario Draghi and Enrico Letta have fundamentally altered the policy landscape. Both reports identify regulatory fragmentation as a major obstacle to European competitiveness. Both call for more ambitious integration measures capable of allowing innovative firms to grow within Europe rather than relocating abroad.

Against that background, EU Inc. is not simply another optional company form. It has become part of a much larger project: preserving Europe’s capacity to compete in an increasingly geopolitical global economy.

This broader context matters because constitutional questions are rarely assessed in isolation. Courts, legislators, and governments do not evaluate legal instruments in a vacuum. They evaluate them against the practical problems those instruments seek to solve.

If European policymakers become convinced that a genuinely European start-up vehicle is essential to strengthening innovation, venture capital markets, and technological sovereignty, it is difficult to imagine the project being abandoned solely because legal scholars disagree about the optimal Treaty provision.

Article 114 Is Probably Good Enough

Even on its own terms, the legal-basis debate may be less dramatic than some commentators suggest.

It is true the Court’s decision concerning the SCE Regulation casts a shadow over the proposal. Yet constitutional precedents operate within specific factual and regulatory contexts. The European Union of 2026 is not the European Union of 2006.

Over the last two decades, the Court’s interpretation of Article 114 TFEU has become remarkably expansive. The jurisprudence on internal-market harmonization has consistently emphasised practical effects, market integration, and the prevention of regulatory fragmentation. The Court has repeatedly accepted broad understandings of what constitutes an internal-market measure. And EU Inc. can plausibly be viewed through precisely that lens.

Its purpose is not merely to create a symbolic European corporate form. It seeks to reduce barriers arising from divergent national incorporation procedures, financing rules, governance structures, and legal infrastructures. Whether one labels that process “approximation” or “creation” may be less significant than it initially appears. In functional terms, the proposal addresses obstacles generated by the coexistence of twenty-seven different corporate-law regimes.

The Court has often favoured substance over formal categorisation in internal-market cases. It would therefore be surprising if the constitutional fate of a major competitiveness initiative turned entirely on whether EU Inc. is characterised as an optional company form or as a harmonisation measure.

Moreover, even if aspects of the proposal require adjustment, that does not imply that the project itself is constitutionally doomed. Legislative compromises are routine. Individual provisions may be revised. Certain matters may be relocated to parallel instruments. The legal architecture can evolve without abandoning the underlying objective.

The Real Constraint Is Political, Not Constitutional

Perhaps the most important weakness in the legal-basis critique is that it assumes constitutional law is the primary constraint on European action. In reality, the primary constraint is almost always political agreement.

The history of the Single Market offers countless examples. The question is rarely whether lawyers can identify a plausible legal basis. The question is whether Member States can agree on the substance of the proposal.

If 27 governments support EU Inc., the Commission supports it, the European Parliament supports it, and Europe’s innovation ecosystem supports it, the probability that the project ultimately collapses because of a disagreement over TFEU Articles 50, 114, or 352 appears relatively small. Conversely, if political support disappears, the most perfect legal basis will not save the initiative.

This is why the constitutional discussion risks misidentifying the central challenge. The decisive question is not whether Article 114 represents the theoretically optimal legal basis. The decisive question is whether European governments believe that Europe needs a common corporate vehicle capable of competing with Delaware, Singapore, and other globally attractive jurisdictions. That is ultimately a political judgment.

The Cost of Failure Has Increased

Another reason why the constitutional debate may be overstated is that the cost of failure has changed dramatically.

The EU has long struggled to create legal frameworks capable of supporting high-growth firms. European entrepreneurs continue to face fragmented legal systems, fragmented capital markets, and fragmented regulatory environments. Many of the continent’s most successful firms either relocate abroad, seek foreign capital, or structure themselves through non-European legal vehicles.

For decades, these shortcomings were viewed as unfortunate but manageable. Today they increasingly appear strategic.

The global competition for innovative firms, talent, investment, and technological leadership has intensified. European policymakers increasingly frame economic competitiveness as a matter of security and geopolitical resilience. The language of “strategic autonomy” and “technological sovereignty” reflects precisely this shift. Within that context, EU Inc. is no longer merely a company law project. It is becoming an instrument of industrial policy, capital-markets integration, and geopolitical strategy.

Projects that occupy such a position tend to acquire remarkable political momentum. Once policymakers conclude that an initiative is strategically necessary, institutional energy typically shifts toward making it work rather than identifying reasons why it cannot.

Constitutional Perfection Should Not Become the Enemy of Reform

None of this implies that constitutional questions should be ignored. They should not.

The ECLE contribution performs a valuable service by highlighting genuine legal uncertainties. Clarification of Article 4 may certainly be desirable. Certain provisions may indeed require refinement. The relationship between Union law, articles of association, and national law deserves careful attention.

But constitutional analysis should remain proportionate to the practical stakes involved. There is a danger that European company lawyers view EU Inc. through the lens of past debates over the SE, SCE, and other supranational forms. Those projects emerged in a different era, pursued different objectives, and occupied a different position within the broader integration agenda.

EU Inc. belongs to a new generation of European initiatives. Its primary purpose is not symbolic Europeanisation. It is functional competitiveness.

That distinction matters. The question facing policymakers is ultimately straightforward: does Europe need a genuinely European corporate vehicle for innovative firms? If the answer is yes, the legal system possesses ample resources to accommodate that objective. The Treaties are not a suicide pact. Nor are they designed to prevent the Union from responding to pressing economic challenges.

The history of European integration offers a consistent lesson. Constitutional objections rarely defeat projects that enjoy strong political support and respond to widely recognized structural problems. More often, they shape the form those projects ultimately take.

EU Inc. is likely to follow the same path. The decisive battle therefore concerns political ambition, not constitutional theory. If Europe truly wants an EU Inc., it will almost certainly find a way to create one. Where there is a will, there is a way.