The European Commission presented on Wednesday a package of proposals for the relaunch of the European industry under the concept of „Made in Europe,” at a time when the continent’s economy is facing increasing competition from China, high energy costs, and the pressure of green transition.
The initiative, called the „Industrial Accelerator Act,” was presented by the Vice President of the European Commission, Stéphane Séjourné, and aims at reindustrializing Europe and strengthening production chains on the continent.
"It is more than just a change in the way of operating; it is a change in doctrine, which until a few months ago would have been inconceivable," Séjourné stated.
Objective: Industry to reach 20% of the EU's GDP
The European executive wants the share of industry in the Union's economy to increase significantly in the next decade.
"Our goal is clear: to bring the industry to 20% of the European GDP by 2035, from the current 14%," announced the Vice President of the European Commission.
The plan aims to maintain essential industrial sectors in Europe, such as the automotive industry, in the context of competition with Asian manufacturers and accelerated technological transformations.
At the same time, the strategy targets the decarbonization of the industry and the increase in demand for products manufactured in Europe with reduced carbon emissions.
"European preference" for public funds
One of the most sensitive proposals is the introduction of a "European preference" when public funds are used - an idea that has long been considered taboo in the EU due to the risk of protectionism.
In practice, companies in strategic sectors benefiting from public funding could be required to use a certain percentage of components produced in Europe.
Automotive industry and green technologies among the targeted sectors
Among the sectors targeted by the new strategy are the automotive industry and sectors related to the energy transition.
For electric vehicles to benefit from public subsidies - such as purchase premiums - they should contain at least 70% locally produced components, and the batteries should be manufactured in Europe.
In addition, the plan includes:
- solar panels
- batteries
- heat pumps
- nuclear sector
- heavy industries
Furthermore, construction companies or the automotive industry receiving public funds could be required to use cement and aluminum produced in the EU.
However, to the dissatisfaction of the steel industry, the project does not mandate the obligatory use of European steel but only steel with reduced carbon emissions.
France calls for tougher measures
France, one of the main supporters of the "European preference" idea, believes that the Commission's proposals do not go far enough.
The French Ministry of Economy stated that the measures represent "a major breakthrough" but "do not sufficiently protect European industrial interests."
The Minister Delegate for Industry, Sébastien Martin, demanded that the advantages for European producers be "clearly reinforced," and Paris promises to negotiate changes to the text in discussions with other member states.
Difficult compromise among EU states
Negotiations among member states have been challenging, especially due to fears of protectionism and the risk of trade conflicts.
Germany and several Nordic states were initially hesitant about the idea of a European industrial preference but ultimately accepted it in a more limited and targeted form.
To avoid commercial retaliation and disruption of global supply chains, the Commission agreed that certain partner countries could benefit from similar treatment.
"Made in Europe," but also with partners
Under these conditions, the concept of "Made in Europe" could include, in certain situations, components produced in partner countries of the EU.
Around 40 countries could be included in this mechanism, including the United Kingdom, Canada, or Japan, if they respect the principle of reciprocity in trade relations.
"Trusted partners with whom we have trade agreements will be integrated into the system if they fulfill their commitments," Séjourné stated.
Foreign investors could have new obligations
The project also includes additional conditions for foreign investments in strategic sectors, including obligations related to:
- job creation
- research and development activities
- local economic benefits
Although not explicitly mentioned, China appears to be the main target of these rules.
Simplified procedures for building factories
Meanwhile, Brussels aims to simplify administrative procedures for building or expanding factories in Europe, so that industrial projects can be approved more quickly.
The Commission's proposals must be approved by member states and the European Parliament before becoming law.