Our Deputy Director discusses with Anna-Lena Kümpel and Rasmus Andresen how a common industrial policy could work in Europe.
This podcast episode focusses on how Europe should use industrial policy instruments in order not to fall behind globally and to react to the US Inflation Reduction Act (IRA).
According to Nils Redeker, it is a structural dilemma for the EU "that we are not institutionally prepared for this form of global industrial policy." This is because the EU budget is very small and inflexible for a common industrial policy and therefore industrial policy is still "a matter for nation states". However, if individual countries with deep pockets, such as Germany, were to rush ahead with industrial policy subsidy programmes, Redeker said, this would jeopardise the internal market.
To enable an effective industrial policy in Europe, Redeker believes that the EU must think carefully: "What do we want to be good at and why? Which sectors do we really need to have and develop in Europe? And then we also need to think a lot about governance."
You can learn more about this and the reform of the fiscal rules in the podcast (in German).