The paper analyses the impact of the shocks that have affected the European Union (EU)'s industrial economic activity and international competitiveness since 2020. It then describes EU industrial policy instruments, adopted at both national and European level, and the initiatives undertaken to counter these crises and to face the twin green and digital transition and the new geopolitical context. Finally, it provides some policy considerations.
The sectors most affected by the recent shocks and the structural transformations linked to the green and digital transition are the energy-intensive, mechanical, electronic and automotive industries. The EU approach to industrial policy increasingly emphasizes sectoral initiatives to promote investment in strategic sectors and to increase economic and national security. A competitiveness-enhancing industrial policy would require a rethinking of current rules, greater cooperation between European institutions and Member States, and targeted and adequate funding.
