The European Union is preparing to introduce a series of new measures aimed at prioritizing local companies in investment decisions by both member states and foreign firms, challenging decades of free-trade principles.
In a draft of the Industrial Accelerator Act, the European Commission, the EU’s executive arm, plans to unveil rules later this month that would impose strict conditions on key foreign investments exceeding €100 million ($116 million), including requirements to share technology, hire local workers, and form joint ventures with European companies, according to Bloomberg.
The proposal comes as Europe faces a prolonged slowdown in industrial production, with energy-intensive sectors struggling under high fuel costs stemming from Russia’s invasion of Ukraine nearly four years ago.
Ongoing supply chain disruptions have further driven up costs, while China is rapidly gaining ground in emerging clean-tech industries, leaving European companies lagging in the global 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.”
However, the plan has sparked internal debate within the EU, with officials warning that it could veer into excessive protectionism. Some senior diplomats from aligned countries cautioned against overreaching in efforts to revive European industry. “In some ways, we’ve faced less resistance to this idea in China than within parts of the Commission,” one EU official remarked.
A spokesperson for the European Commission did not immediately respond to requests for comment.
Under the proposed framework, EU member states would also face tighter rules governing public procurement. For example, the lowest bid would no longer be the sole criterion when purchasing new bus fleets.
