You have probably read the news that Airbus Space and Safran wanted to team up to be more competitive against SpaceX. I am not sure that it is the right solution to develop a future European Falcon. First, they remain a part of their mother companies, which feature, because of their size, a huge inertia in terms of development. Second, they will have a problem of culture: it will be a hybrid between a system designer and an engine developer with very different methods. SpaceX is from the beginning a homogeneous company integrating both the system and technology in its culture.
In my opinion, the only solution is to create in Europe the conditions for entrepreneurs (and very bright ones) to create their own space startup. These conditions do not exist for the moment. And it will be a hard task. Airbus, Safran, Thales will block any attempts and they have a lot of weight among politicians in charge of the space program: they recruit their staff from the same pool. It was also the case in the US with Lockheed, Boeing and co. The big trump that Elon Musk played was the Silicon Valley, something that does not exist at all in Europe. SpaceX was able to get the support, the benediction and the image of a Californian startup and to use it to install its political credibility. There is no such lever on the Old Continent and this will be the major difficulty.
In addition, we have here a reduced culture of risk-taking: your diplomas, your position in a well-known company insure you recognition, not being part of a startup even if you build space rockets.
The last problem is the European Space Program itself: it is not ambitious; it has never been ambitious. SpaceX arrived at a point where NASA was lacking of funding but it was still ambitious. So they were eager to accept any viable solution; SpaceX was a solution; they took it to insure an ambitious program. If an European startup goes to ESA and say: we have the way to build a cheap launcher but we need your technical support, the answer will be: “What for?”.
There is no easy solution; but maybe, there is somewhere an European Musk with a high sense of strategy and a genial technical background and he will soon show us his hand.