So, there is a need for EU clean industrial policy and no real strategy yet. How to move on? The good news is that the COM doesn’t need to reinvent the wheel to do things better this time. To deliver an effective strategy, it just needs to move quickly and pragmatically on three fronts: - ThreadSky

nilsredeker.bsky.social • 3 days ago

So, there is a need for EU clean industrial policy and no real strategy yet. How to move on? The good news is that the COM doesn’t need to reinvent the wheel to do things better this time. To deliver an effective strategy, it just needs to move quickly and pragmatically on three fronts:

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nilsredeker.bsky.social•3 days ago

First, the COM needs to set some genuine sectoral priorities. The Draghi report offers a solid framework for selecting industries (below). We get that officially writing off sectors is politically tricky—but providing a focused positive list with clear sector-specific goals should be doable!

nilsredeker.bsky.social•3 days ago

Second, the Commission should use existing EU instruments to develop sector-specific strategies. There’s plenty of talk about the need for a new competitiveness coordination tool to steer national industrial policies. We think that’s a distraction.

nilsredeker.bsky.social•3 days ago

The COM doesn’t need to coordinate national policies (which, btw, never works). It already has powerful industrial policy tools at the EU level in trade, procurement, and single market regulation. It just needs to apply them with real strategic intent. In the paper, we outline some ideas for that.

nilsredeker.bsky.social•3 days ago

Third, it should use its state aid rules to steer national subsidies towards common priorities. While the EU lacks the deep pockets to finance industrial policies centrally, the COM has broad discretion in deciding which state aid measures comply with EU rules.

nilsredeker.bsky.social•3 days ago

The obvious downside of financing EU industrial strategies via national budgets is the risk of market fragmentation and subsidy races between member states. But our data shows that spending on priority sectors is currently not skewed towards wealthier member states.

nilsredeker.bsky.social•3 days ago

At least in the coming years, the EU has some leeway to rely on instruments like improved IPCEIs, EU-led support schemes that allow for national co-financing like the Hydrogen bank or harmonized criteria for national purchase subsidies (including buy 🇪🇺 provisions) to support strategic industries.

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