A Major Shift in the EU: The "Made in Europe" Plan and Its Controversies
In Brussels, a change in economic policy is on the horizon. For a long time, the European Union was seen as a champion of free trade and open markets. However, in light of geopolitical tensions, growing industrial policy in the US and China, and the energy crisis following the Ukraine war, a new guiding principle is taking center stage: strategic autonomy.
Under slogans like "Made in Europe" or "European Preference," politicians are discussing a stronger preference for European companies – particularly in public procurement and strategic industries.
France as a Driving Force
The idea is not new. As early as 2012, then-French President Nicolas Sarkozy called for a "Buy European" act modeled after the US Buy American Act. In 2017, President Emmanuel Macron picked up the concept of "European sovereignty" in his Sorbonne speech. He argued that Europe must become more independent – in defense, energy, technology, and industry.
Macron's argument: If public investments specifically strengthen European providers, the continent can secure its industrial base and reduce strategic dependencies.
Germany remained skeptical for a long time. As an export-heavy economy, the Federal Republic benefited significantly from open global trade. A protectionist turn was seen by many as a risk to global supply chains and international partnerships.
Why the Debate Is Gaining Momentum Now
1. Europe's Declining Share of Industry
Europe's share of global industrial value added has dropped significantly since the beginning of the 2000s. While the EU once accounted for about a quarter of global industrial production, its share today is only around 15–16 percent. Meanwhile, China is pursuing an aggressive state industrial policy with "Made in China 2025."
2. The Energy Crisis After the Ukraine War
Before the Russian attack on Ukraine, the EU obtained about 40 percent of its natural gas from Russia. Particularly energy-intensive sectors such as chemicals, steel, and glass came under pressure after cheap gas imports ceased. This dependency became an economic vulnerability.
3. New US Industrial Policy
With the Inflation Reduction Act, the United States approved massive subsidies for green technologies. European companies fear competitive disadvantages, as many support programs are tied to production sites within the USA.
4. Security Policy Uncertainties
In parallel, concerns are growing in Europe that the US can no longer be unconditionally relied upon as a security guarantor in the long term. This has added importance to the expansion of Europe's own defense industry.
What the "Made in Europe" Approach Specifically Proposes
The proposals target three central measures:
- Preference for European providers in public tenders
- Targeted subsidies for key technologies (batteries, semiconductors, renewable energies)
- Local value creation requirements for state-funded projects
With laws such as the Net-Zero Industry Act and the Critical Raw Materials Act, the EU has already set the first industrial policy course. In the long term, the industrial share of European economic output is expected to rise back to around 20 percent.
Criticism from Export-Oriented Member States
However, not all EU countries welcome this course. Export-oriented states, in particular, warn of rising costs, potential trade conflicts, and a weakening of the single market. Economic analyses by the OECD show that local content requirements can often lead to efficiency losses and higher consumer prices.
Critics instead advocate for internal reforms: less bureaucracy, stronger capital market integration, and targeted innovation support rather than broad protectionist measures.
A Strategic Crossroads
Europe faces a fundamental decision. Should it continue to rely on global integration – or push for stronger industrial independence? The answer will decisively shape the economic future of the continent.
Sources
- Eurostat: EU trade in goods and services statistics
- World Bank: Manufacturing, value added (% of GDP)
- UNIDO: Industrial Development Report
- European Commission: REPowerEU Plan (2022)
- European Commission: Net-Zero Industry Act (2024)
- European Commission: Critical Raw Materials Act (2024)
- U.S. Government: Inflation Reduction Act (2022)
- OECD: Local content requirements and trade policy analyses
- Emmanuel Macron: Sorbonne speech on European sovereignty (2017)
