ALL ABOUT 'MADE IN EUROPE' IN INDUSTRY - by Maria Psara 15/3
The Commission has presented a proposal to strengthen European industry, with its basic "doctrine" being "made in Europe". The aim of the European Commission is to create favourable conditions for European companies but also to achieve strategic autonomy and the climate transition.
The proposal aims to reduce dependence on third countries, in particular China, for critical technologies and low-carbon products and strengthens the European industrial base in the face of unfair global competition and subsidies from third countries. This is essentially a proposal insisted on by France, concerning the preferential treatment of European industries in terms of subsidies and the conclusion of public supply contracts.
However, the French proposal has caused strong disagreements within the European Union. Even before it was approved by the College of Commissioners by a narrow majority, it had to be postponed three times since the beginning of the year, going through three special preparatory sessions and dozens of amendments.
The main "thorn" is "made in Europe", which seems to be troubling countries such as Germany, for example, which has moved a large part of its production to China for years. The issue of cooperation with third countries is also a cause for concern, since the 27 do not necessarily agree on who will be the "reliable partners" who will be able to participate in business in the EU.
"What I am presenting to you today is more than just a change in operational processes. It is a change in doctrine – unthinkable just a few months ago. But what is happening now – particularly in Iran – shows us more and more every day that we need to strengthen our strategic sectors," said Executive Vice-President of the Commission, French Commissioner Stéphane Céspurne, presenting the proposal.
Restoring European industry to 20% of European GDP
The Commission's goal is to bring industry back to 20% of European GDP by 2035, compared to 14% today. Faced with huge subsidies from some competitors such as China, market distortions and trade threats such as with the US, the Commission says that European companies are playing at a disadvantage in Europe itself!
"How can we explain to our citizens that decarbonization is good, if our batteries are made in China? Who will invest in our industrial facilities if our products are hampered by unfair dumping? We want, we need to produce more in our strategic sectors," Seurnay explained.
There are three measures chosen by the Commission for this purpose. Firstly, taxpayers' money should primarily benefit European production and jobs in Europe, especially when public funds are involved: public procurement, purchase incentives or direct subsidies.
For each sector, the Commission requires a certain number or percentage of critical components to come from Europe. For some key technologies, even the specific components are specified: in a battery, for example, it is the cell, in a solar panel it is the inverter and the photovoltaic cell.
Also, the Commission wants to set criteria for foreign investment, especially in strategic sectors, such as batteries, electric vehicles, photovoltaics, critical raw materials.
Criteria
There are six criteria, four of which are essential for any investment: technology transfer, at least 50% of workers being based in the EU – this criterion is mandatory. Also, the foreign participation limited to 49% of the capital, there should be partnerships with European entities, 1% of the global turnover invested in Research in the EU and 30% of the components purchased for the final product must come from the European value chain.
"We are targeting investments of more than €100 million from a foreign country with a global market share of more than 40% in this sector. Europe must be an integrated industrial base. Not just an assembly platform," as the Executive Vice President noted.
Finally, the Commission wants to create Industrial Priority Zones. "It will be to industry what Natura 2000 sites are to nature. Zones where businesses will have access to simplified licensing procedures, energy, raw materials and financing, so that investments in Europe can become simpler and faster again", concluded St. A hairdryer.
For Cyprus, which in 2025 recorded a 5% increase in its industrial turnover, this proposal sets strict conditions for foreign investment of more than €100 million, requiring 50% European employment, which ensures that new investments on the island will create local value and jobs.
According to European sources, the focus on zero-emission technologies (batteries, solar) is an opportunity for Cyprus to develop domestic production and assembly, taking advantage of the "Made in EU" incentives.
Also, reducing dependence on non-European suppliers enhances the economic security and resilience of the Cypriot market.
Objections
The most controversial element of the plan is "made in Europe". According to the proposal, in the automotive sector, at least 70% of the components in electric vehicles should come from European production, while batteries would also have to be manufactured in Europe, to qualify for support. For European car manufacturers that have complex global supply chains, this could be problematic.
Is Turkey a "trusted partner"? – The role of Cyprus
The second issue that has also garnered a lot of controversy is which non-EU countries can be designated as "trusted partners" of the EU to qualify for projects funded by public funds. According to the Commission, non-EU countries can be included if they offer equivalent access to European companies in their own markets, such as the United Kingdom.
"We don't exclude anyone," said Sezourne, "as long as they play fair and meet the criteria." In this context, it is not excluded that Turkey is a possible country of cooperation, but this will be discussed in detail before the final approval of the proposal.
Ankara has already made sure to protest its possible blockade, mainly concerned about its car industry. It is not excluded that it will be exempted from public contracts, as the modernization of the customs union, which also concerns this part, remains pending. In other words, something that passes through the Republic of Cyprus.
According to a European official, for public programs and tenders, as long as the customs union exists, Turkey will have access, unless it excludes products from the EU in its own public programs and tenders. Such a case would be a negotiating argument for its exclusion.
