The problem is euro-racism and not much integration of workers and businesses in EU.
A successful french startup means a loss of jobs and wealth to other countries. DACH customers will prefer working with DACH companies, French customers will prefer working with French startups.
If you dont work in english speaking environment (IT) moving countries within EU is practically impossible for people working normal jobs.
Yes, this is entirely true as well. Though US companies face this effect as well. But as a result EU companies get practically no competitive advantage compared to an American company when they want to operate in other EU countries, and if the EU wants to exist this imbalance of power need to be addressed or it will keep snowballing.
The EU regulatory burden is the real culprit, it stifles international reach and makes it much more expensive for small companies.
Not saying all regulations are bad, I like a lot of them, but if you have a company in the EU, especially one in the manufacturing industry then you know.
Yet regulation is nowhere to be seen in the leading complaints from French manufacturing companies (which means it's way behind the price of energy, the lack of qualified workforce, and the lack of capital).
It also doesn't prevent international actors to arrive in the EU market, and from personal experience it's easier to do business in the EU when you are an American company than the opposite by a significant margin.
I'll check French registration!
At least in my country (France) it's not any harder than registering as an independent worker (you often use the exact same legal vehicle for both).
The real problem with European tech is that it's too easy for US company to land on the continent, and since they have a biggest market to begin with they always end up stronger than European companies when it comes to addressing the other European markets. The “single market” is a fantasy, every country has its own language, culture and business practices, things that EU's homogenization of regulations between country since the 80s have never overcome and never could have, and because of that it's not harder for an American company to do business in an EU country that it is for another European country.
Since forced homogenization isn't gonna do it, the correct approach would be to put barriers to foreign entry like Evey successful Asian country did in the second half of the 20th century with great success.
Advocating for free trade with a much more powerful country than your is as insane as it would be to advocate to remove the fences in a zoo…