European industry finds itself at a pivotal moment as the EU wants to strengthen its industrial autonomy. Speaking to RTL, René Winkin, director of the Luxembourg Federation of Industrialists (FEDIL), walked through the main opportunities and potential pitfalls of the EU's evolving strategy.
The European Commission's Industrial Acceleration Act, unveiled in March, sets out four main priorities, according to Winkin: driving investment, including by encouraging European stakes in foreign-led projects; simplifying and digitalising administrative procedures; designating special zones to fast-track industrial activity; and putting in place a "Buy European" concept.
Winkin was quick to concede that it made no sense to want to produce everything in Europe. Europe, he said, is dependent in far too many areas for that to be a realistic ambition. What bothered him, however, was that in relative terms, Europe was slipping behind. Over recent years, the continent had grown more reliant on Asian and American producers and suppliers alike.
The goal now, Winkin explained, is for a number of more strategic products to be manufactured more strongly in Europe again, either by European companies or by investors from outside who choose to base their production on European soil. The question then becomes whether the manufacturing sits in Europe, and what the quality of what is being produced here really is.
"Investment has to be stimulated, also when investors come from outside Europe", Winkin explained. "But in some cases, there should be European participation in those projects." He added that the Commission wanted to speed up and streamline procedures, particularly in sectors regarded as strategically important for Europe.
One key challenge, Winkin noted, lies in defining what makes a product "European". Does it have to be entirely produced within the EU, or is a certain share of local content enough? "It could be easy to circumvent such rules", he observed, voicing caution about how effective the new requirements might end up being.
FEDIL's director came out firmly against protectionism. "Openness is one of our core values, and we want to preserve it", Winkin said. "This must not lead us into protectionism. Our clear goal has to be greater resilience."
He argued that if the EU pursued measures to strengthen its autonomy, these should be "very selective and perhaps only temporary, until we have rebuilt our own capacities". Without a real focus on competitiveness, however, the whole strategy would fall short. "We have to implement the competitiveness agenda, which is the basis for making production in Europe stronger again", Winkin said.
Reciprocity in global trade was another recurring theme. "If we said we would only subsidise electric vehicles made in Europe, and South Korea then did the same for their own cars, we would have to pay close attention to reciprocal arrangements. We need to be careful with our trading partners", he cautioned.
Winkin also flagged the risk of higher consumer prices and reduced industrial competition. "If we exaggerate with restrictive procurement and start pushing operators out of Europe, everything will become more expensive", he said. Policymaking, he added, should not end up leaving only a handful of firms in dominant positions on the European market. "The aim is to regain technological leadership in certain sectors."
Turning to the obstacles facing European industry, Winkin pointed to "energy costs, especially for basic industries, which tend to be energy-intensive". He highlighted that Europe is essentially alone in operating a broad CO2 pricing system. "At some point, every company here will have to buy emissions quotas at high prices, which no one else has to do", he explained.
"This is not meant as an argument against climate policy, but we need to generalise it and create a level playing field", Winkin added. He also took aim at overregulation: "In the last six years, since 2019, the Commission has legislated extremely actively. Even if some simplification is attempted, a flood of new regulations is still coming, and many of them are not yet implemented. So more is being piled on."
Winkin also brought up the Draghi Report, observing that as far as he is aware, not one of its measures has been fully put into practice so far. The report, commissioned by European Commission President Ursula von der Leyen and authored by former European Central Bank chief Mario Draghi, sets out the biggest challenges facing European industry, looks at the future of European competitiveness and offers concrete recommendations.
On the question of strategic autonomy in technology, Winkin pointed to digital, defence and health as areas where European reliance on external providers is particularly risky. "In digital, we are so intertwined that it will be very hard for Europe to do everything alone", he acknowledged. The recent example of AI provider Anthropic restricting its services to non-Americans, he said, "is a signal that this is a real issue and that we need to catch up".
How far Europe can go, in Winkin's view, will hinge on its regulatory choices. "It depends on our legislation, whether it slows us down or allows us to move forward quickly in developing AI, so that Europe can become strong in certain areas." He warned that "if we fall behind in all sectors, our dependence will become dangerous".
Luxembourg, Winkin said, has valuable assets in data storage and processing. Even so, "everything needs to move much faster", particularly when it comes to site availability and permits. Behind the headline term "digital", he pointed out, are concrete industrial facilities with real energy needs.
The recent joint street protests in Brussels, in which industry federations and unions took part side by side, underline the urgency of the moment. "It is remarkable that industry associations and unions are demonstrating together. This is really exceptional", Winkin said. He concluded that Europe had to "focus more on industrial policy, not just setting intentions, but actually delivering results at real speed".
