EU states clash over industrial subsidies amid competitiveness push
Competing views
The debate on the EU’s competitiveness is heating up as different countries are adding their flavour to the sauce ahead of today’s meeting of industry ministers, write Barbara Moens and Alice Hancock.
Context: Boosting the EU’s languishing economy is a key priority for Brussels, but the views on how to do that diverge. France is pushing to protect Europe’s industry via “Buy European” clauses, while more economically liberal countries would rather deepen the existing single market.
Another element of the debate is industrial subsidies and who should benefit from them.
Sweden, together with nine other countries including the Netherlands, France and Germany, is leading the charge to shape a proposed €409bn “European Competitiveness Fund”, a key element of the next EU budget starting in 2028.
In a document seen by the FT, the countries call for strict criteria for disbursing the funds in order to “deliver European added value and address market failures, while emphasising the promotion of innovation and productivity growth”.
Smaller and poorer EU countries, however, don’t want to attach too many strings to the funding and keep it general. They fear they will otherwise lose out to wealthier countries that already have cutting-edge research and start-ups.
In the document, the 10 countries push back against those arguments, saying that the goal of the fund is to ensure the EU remains a global player, while other policies and cohesion funds are there to strengthen the “Union’s overall competitiveness”.
Ministers will also discuss a separate note from Finland, Estonia, Ireland, Latvia, Slovenia, Romania and the Czech Republic on a “more effective competition policy”. In it, they oppose the broad loosening of merger rules to scale up European companies, something the Commission has envisaged.
“Size in itself should not be the primary objective,” the countries write.
Finnish economy minister Sakari Puisto told the FT that his country will highlight “the importance of an independent and effective EU competition policy” in today’s meeting. “Strengthening Europe’s competitiveness is more important than ever,” he added.
EU leaders are set to discuss the bloc’s economic competitiveness and how to improve it at their next meeting in March.