EU Aims to Fight Industrial Decline With ‘Made in Europe’ Law
(Bloomberg) -- The European Union is set to propose a swathe of new conditions to ensure local companies are prioritized when investment decisions are made in the region by member-states and foreign firms, upending a free-trade philosophy that has governed decades of policy.
The European Commission, the bloc’s executive branch, will later this month unveil new rules subjecting key foreign investments totaling over €100 million ($116 million) to strict conditions around sharing technologies, hiring local workers and setting up joint ventures with European companies, according to a draft of the Industrial Accelerator Act seen by Bloomberg News.
The proposal comes amid a deepening slowdown in industrial production in Europe, with some of the most energy-intensive industries grappling with high fuel prices following Russia’s invasion of Ukraine almost four years ago. Supply chain disruptions have also resulted in cost escalation. Meanwhile, China is increasingly dominating new clean tech sectors, leaving European companies behind in the race.
“The combination of high energy prices, the need for large-scale decarbonisation investments and unfair global competition places energy intensive industries at a competitive disadvantage, and there are growing signs of industrial decline,” said the draft document, which is still subject to change. “The Union’s economic security requires the strengthening of the resilience of its supply chains and the safeguarding of its single market and industrial capacity.”
But the plan has provoked internal dissent among EU officials, who have flagged the risk of excessive protectionism, while some senior diplomats from like-minded countries warned against going too far in attempts to rebuild industry. One EU official said they found less resistance to this idea in China than in some corners of the Commission.
A representative for the European Commission didn’t immediately respond to a request for comment.
Under the proposed system, EU member states will also be subject to strict new rules on their public procurement processes. The lowest price will no longer be the only consideration, for instance, when they buy a fleet of new buses. They will have to ensure that those products have a minimum percentage of European-origin content, with some exemptions for countries that have a free-trade agreement with the bloc.
Other elements of the draft law will include the possibility of setting up “stockpiling centres” for imported critical raw materials to help make the EU more resilient to future supply shocks. The rules will also aim to fast-track new projects, and create new “green label” for steel.
©2026 Bloomberg L.P.
