The European Commission (EC) President Ursula von der Leyen has endorsed a plan aimed at prioritising European firms in specific “strategic” industries, a move set to be discussed at an upcoming leaders’ summit focused on enhancing competitiveness within the European Union (EU).
The proposal, expected to be unveiled by the EU executive later this month, seeks to give preference to European companies in public procurement contracts for crucial sectors.
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However, the initiative has encountered resistance from certain member states and international partners.
The President, in a letter directed at EU leaders, emphasised the necessity for Europe to protect its strategic interests while promoting domestic production.
Von der Leyen said: “A European preference is a necessary instrument that contributes to this objective. It can help create lead markets in strategic sectors and support the scaling-up of European production capabilities.
“Its use must be underpinned by robust economic analysis and aligned with our industrial priorities, while engaging constructively with trusted partners.”
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By GlobalDataThe proposal, as outlined in a draft viewed by AFP, would require firms competing for public contracts in industries such as automotive and green technology to demonstrate that a proportion of their products are manufactured within Europe.
The EC has postponed its proposal twice due to intense internal debates, with some stakeholders advocating for a reduction in its scope.
Stephane Sejourne, EU industry chief, has advocated for a European equivalent to the “Buy American Act” and China’s domestic production policies, aiming to safeguard European enterprises.
In a recent op-ed joined by over 1,100 CEOs and business leaders, Sejourne expressed that European public funding should support domestic production and employment.
The “Made in Europe” initiative has been a longstanding priority in France, with Paris pushing for stringent restrictions on defence acquisitions from outside the EU.
Nonetheless, this enthusiasm faces scepticism from other EU countries.
Turkish President Recep Tayyip Erdogan, in a letter to von der Leyen obtained by AFP, cautioned about the potential adverse effects on Turkey, which shares a customs union with the EU. Erdogan particularly highlighted concerns regarding the automobile industry, a sentiment shared by Japanese corporations both publicly and privately.
Japanese automaker Honda has appealed to Brussels to adopt a broader approach, suggesting a “Made with Common Values” concept. The company warned that overly strict local content requirements might not necessarily bolster European manufacturing, given the global nature of the industry.
