When it comes to industrial policy, the EU remains big in ambitions but meager in substance. This is not surprising. The EU aims to follow the international trend towards more active industrial policy. But it has to do so within a framework that was designed to discourage – indeed even prevent – the kind of investment-centered policies that seem the most effective. For the EU’s industrial strategy to grow some teeth, three fundamental changes are needed: first, new financial instruments for more common resources; second, a stronger macroeconomic focus on growth and employment; and third, better European governance.