EU Industry Chief Pushes for ‘European Preference’ Amidst Growing Competition
Brussels – European Commission industry chief Stéphane Séjourné is spearheading a push for a “European preference” in public procurement and state aid, aiming to bolster the bloc’s competitiveness against intensifying challenges from China and the United States. The proposal, which would prioritize companies with substantial production within the EU, has ignited a debate among member states, exposing deep divisions over the best path forward for European industry.
Séjourné framed the issue as central to Europe’s geopolitical strategy, arguing that a commitment to European production is vital to securing the future of key industries. “We must establish, once and for all, a genuine European preference in our most strategic sectors,” he wrote in a recent op-ed. He emphasized that public funds should directly contribute to European production and the creation of quality jobs within the EU.
The initiative calls for companies benefiting from public funding – whether through procurement contracts, state aid packages, or other financial support – to demonstrate a significant level of output within the European Union. Séjourné points to the practices of other major economic powers, suggesting that national preferences are already commonplace in protecting strategic assets.
However, the “Made in Europe” strategy is not without its detractors. Several EU member states have voiced concerns that such a policy could disproportionately benefit larger economies within the bloc, potentially creating imbalances and hindering investment in smaller nations. Sweden and the Czech Republic, for example, have warned that “buy local” requirements could raise prices and undermine overall competitiveness, according to reports.
The debate is set to take center stage at an upcoming EU leaders’ retreat focused on boosting competitiveness. Divisions are expected to be prominent as leaders grapple with the complexities of balancing national interests with the need for a unified European industrial policy.
The proposal has garnered support from a broad coalition of business leaders. Over 1,141 business leaders have signed onto the initiative, including CEOs from major European companies like Thyssenkrupp, Bosch, and Varta. These leaders argue that prioritizing European companies is essential for safeguarding jobs and fostering innovation within the EU.
Despite this support, opposition remains strong. German Minister for Economic Affairs Katherina Reiche has publicly rejected the idea of protectionism, advocating instead for investment, deregulation, and stronger international partnerships. Reiche argues that erecting trade barriers is not the answer to global competitive pressures.
The discussion also extends beyond simply where products are assembled. Some analysts suggest a shift towards a “Made *with* Europe” approach, emphasizing the value chain and the contribution of European components and intellectual property, rather than solely focusing on final assembly location. This nuanced perspective, put forward by the Bruegel think tank, aims to address concerns about overly restrictive “Made in Europe” requirements.
The urgency of the debate is underscored by recent assessments of European competitiveness. The German economy, for instance, recently rated its competitiveness lower than ever before, highlighting the need for a decisive industrial strategy. The outcome of the upcoming EU leaders’ retreat will be crucial in determining the future direction of European industrial policy and its ability to compete in a rapidly changing global landscape.
The core of the argument, as Séjourné has repeatedly stated, is that European public money should be used to support European industry. Whether this translates into a strict “European preference” or a more nuanced approach remains to be seen, but the debate signals a growing recognition of the need for a proactive strategy to protect and promote European economic interests.
