France wants to revolutionize European industrial policy

Berlin, Paris In response to US subsidies for green technologies, France is aiming for a far-reaching reform of European economic policy. In a working paper available to Handelsblatt, President Emmanuel Macron’s government outlines a “Made in Europe strategy” with more state aid and new EU funds. In strategically important sectors, Paris even wants to agree on European production targets.

At the EU summit in mid-December, the heads of state and government asked the Commission to present an answer to the American Inflation Reduction Act (IRA) at the beginning of 2023. Among other things, the US program provides for more generous tax breaks for companies that produce in the US.

Europe sees this as an attack on its own economy. There is a “real risk” of de-industrialization, according to the French paper, which reads like a call to action for the European partners.

Hints point to corporate debt