On Wednesday, Feb. 26, the European Commission released its long-awaited Clean Industrial Deal (CID). This policy package responds to the EU’s challenges of geopolitical tensions, slow economic growth, and technological competition. Within the CID, policies around affordable energy are identified as a cornerstone. This is shaped in the Action Plan for Affordable Energy (AEA). Specifically, these packages aim to restore European industrial competitiveness.
The CID presents an impressive number of measures that appear substantial on paper, but the real challenge lies in the nuances of implementation. While some packages will be implemented as early as 2025, in reality many measures are merely announcements of initiatives that will not take full effect until 2026 or later. This delay contrasts sharply with the speed at which U.S. subsidies through the Inflation Reduction Act and Chinese support measures are being rolled out.
The fundamental challenge lies in the asymmetric structure of the EU itself: while Brussels provides strategic vision and policy frameworks, financial implementation falls largely to the member states. While EU cohesion mechanisms somewhat level out existing differences, the core problem remains that many member states are already struggling with tight national budgets. As a result, new EU policy ambitions for which member states must largely pay themselves come up against an unruly financial reality – a problem exacerbated in the current political climate where nationalist sentiment often prevails over European solidarity.
All in all, the CID is a step in the right direction. It is the impetus from the European Commission that must now be followed up by national member states. Speed and decisive action in a global context where Europe has to compete with superpowers such as the U.S. and China, remains a major challenge. As long as Europe is unable to improve this, plans such as the CID and the AEA will turn out to be fine ambitions, but will not be able to turn the tide for industrial competitiveness in time.
In order to cash in on the European push, member states must do more than just cherry-pick the financially attractive options from the EU-supplied “directives porridge. Restoring European, and therefore national, industrial competitiveness costs money. The alternative, however, is that it will cost us even more money when the same industry leaves for good. They are on the brink. Let us now invest quickly and decisively to preserve our industry.