On Thursday, April 25, at the Sorbonne university, Emmanuel Macron declared his desire to see the European Union become a "world leader" in five key sectors – such as artificial intelligence – by 2030, thanks to "dedicated funding strategies." The ambition is immense, and probably out of reach. It is based on the alarming reality of the economic challenges faced by a weakened Europe, which Le Monde will describe and analyze in a series of five articles starting today.
Indeed, the threats to European industries are mounting. At the Beijing International Automotive Exhibition, which ran from April 25 until May 4, Chinese automakers showed off the excessive scale of their business models, which have been making their European rivals shudder. Supported by the government, they develop vehicles in just 24 months, twice as fast as in France or Germany. To counter the slowdown in its domestic market, China has massively subsidized its factories, and flooded other continents with its lower-cost products.
The dark clouds are also gathering in the US, with the Inflation Reduction Act, a $370 billion aid program designed to accelerate the greening of American industries, launched by Joe Biden in 2022. Many European companies have already packed up and moved across the Atlantic, where energy costs are much lower.
The ideal moment to debate these choices
The French, Italian and German business lobbies believe that, without a stronger reaction, the European industrial sector will be wiped out. On April 16, Mario Draghi, the former president of the European Central Bank, who has been asked to draw up a report on competitiveness for the Commission, called for a "radical change" in Europe if it is to save its factories, which it has not been sufficiently protecting.
And yet, Europe has already changed. Once a champion of free trade, during the Covid-19 pandemic the EU became brutally aware of its excessive dependence on China for many essential goods, such as face masks. The second shock came with the Russian invasion of Ukraine on February 24, 2022, when Moscow suspended gas deliveries, sending energy bills soaring.
In response, a minor revolution has taken place in Brussels. Industrial policy, once taboo, is now back on the table. In addition to the €750 billion recovery plan deployed in 2020, the Commission has authorized more extensive state aid, drawn up a list of critical raw materials that are essential to the green transition and strengthened its trade defense instruments. This is a major turning point. Yet it remains largely insufficient when faced with the Chinese and American steamrollers.
To avoid falling behind, the EU lacks the sinews of industrial warfare: money, namely a vast Union-wide budget capable of taking over from the recovery plan, which is due to end in 2026, and enabling joint investment. European taboos on this subject remain strong, and institutional obstacles are numerous. The European election campaign on June 9 should serve as the ideal moment to debate these choices in depth, and move forward on the path toward a common economic strategy; which will be necessary for the EU's ability to generate innovation and quality jobs, and to finance its precious social model. Nothing less than its future and its place in the world is at stake.