European Commission President Ursula von der Leyen warned that prioritizing "Made in Europe" in public contracts is a "fine line to walk" ahead of Thursday's informal summit of European Union leaders, where the contentious issue will take center stage.

At a castle in eastern Belgium, the EU's 27 leaders will discuss how Europe can boost its competitiveness amid economic and political strain.

Speaking ahead of the gathering, von der Leyen said: "I believe that in strategic sectors, European preference is a necessary instrument that will contribute to strengthening Europe's own production base. It can help create lead markets in those sectors and support the scaling-up of European production capabilities.

"But I want to be clear — it is a fine line to walk. There is no 'one-size-fits-all'. That is why every proposal must be underpinned by robust economic analysis and be in line with our international obligations."

Von der Leyen's guarded backing of any "Made in Europe" policy highlights how contentious the idea has grown in EU politics amid sluggish growth, reported Euronews.

A jump in public spending across the bloc over the past year, including a 150 billion euro ($178 billion) defense program and a 90 billion euro loan for Ukraine, has raised concerns that foreign suppliers, rather than domestic traders, will reap the gains.

France President Emmanuel Macron has been the leading champion of the procurement tilt, also known as "Buy European".

Speaking to reporters ahead of Thursday's summit, Macron described the clause as a "defensive measure" against those who "no longer respect" trade rules.

France's proposal faces pushback from the Netherlands, the Nordic countries, and the Baltic states, which warn the EU preference would add red tape, restrict markets, and deter investors.

In comments given to the Financial Times newspaper ahead of the summit, Sweden's Prime Minister Ulf Kristersson said: "The basic idea of trying to protect European business, if that is the purpose of Buy European, to try to avoid trading with or partnering with other countries, then I'm very skeptical."

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