Re-inventing industrial policy in the EU: a Franco-German approach

Abstract:

Defining industrial policies has traditionally been a preserve of EU member states, upon which the Commission has only impacted indirectly, through numerous measures affecting industry, leaving little room for an industrial policy in its own right. However, growing concern about the EU's future position in the international division of labour has led several member states to request from Brussels a more pro-active approach and closer attention to European industrial interests. This paper investigates the recent trend towards 're-inventing' industrial policy in the EU, France and Germany. It examines the model of intergovernmental industrial cooperation established between these two member states, its usefulness and limitations. It argues that, despite recent regression in France towards old-style interventionist policies, and although German governments sometimes favour a protectionist stance, both countries can also generate new, more constructive, euro-compatible intergovernmental initiatives, but that promoting national champions damages the credibility of such initiatives.