The European Union's "Buy European" plan represents the biggest industrial policy effort in decades, but experts warn that it is also more complex and carries significant risks.
The European Commission is expected to present at the EU summit in March 2026 a broad action plan under the slogan "One Europe, One Market", where "Buy European" will be at the center of this initiative. reports € news.
The political goal is clear: to use European taxpayers' money to support the continent's industry. However, the economic reality is much more complex.
General view
European Commission President Ursula von der Leyen's competitiveness plan, based on reports by Mario Draghi and Enrico Letta, aims to complete the EU's single market by 2027.
It also aims to redirect public procurement and industrial financing towards EU-based products in strategic sectors, such as defense, clean technologies, chips, chemicals and the automotive industry, according to the Telegraph broadcast.
The Commission describes this initiative as Europe's response to the United States' "Buy American" policy. But unlike Washington, Brussels must find a balance between the interests of 27 different economies, while respecting World Trade Organization (WTO) rules and open trade policies.
A proposal was expected before Christmas but was withdrawn after member states failed to reach an agreement. The leaders' summit sent a political message but did not produce any new laws.
Between the lines - protection exception
In one sector, there is a rare consensus. Gunnar Wolf, professor of economics at the Free University of Brussels and senior fellow at Bruegel, draws a clear line:
“We benefit from American weapons, but these purchases also make us vulnerable to the geopolitical influence of the United States over Europe… In the area of security, I think there is a clear reason to buy more European products,” he said.
"Strategic autonomy means that you have to have technology produced in Europe, because otherwise it creates dependence on other actors," the professor added.
However, Wolf is much more skeptical about other sectors, arguing that "we have to be extremely careful that this doesn't just turn into a protectionist policy. If you protect domestic industry without any competition, then what you end up with is a lack of innovation, and that will hurt growth."
According to Wolf, success is not measured by market share or the number of supply chains. He explains that: “The growth of new, interesting and innovative firms, improving productivity, increasing employment… that is what, ultimately, we need.”
Honest diagnosis
Alberto Alemanno, professor of law at HEC Paris, gives a clear picture of reality:
"The EU has neither the industrial base nor the supply chains to act alone in most sectors. A blanket preference will increase costs for downstream industries," he said.
“In truly strategic sectors, a targeted approach is defensible, but only if 'strategic' is defined by rigorous analysis and not for political convenience – as seems to be happening now,” Alemanno added.
The divisions within the EU are already clear. France wants strict rules on local content, while Germany prefers a more flexible approach, called “Made in Europe,” that also includes trading partners such as Canada, the United Kingdom, and Norway. Smaller, more trade-oriented countries worry that they will bear the costs, while France and Germany reap most of the benefits.
"The real tension is between the two clusters of states," says Alemanno, adding that "smaller member states fear that this will increase costs and bring benefits mainly to the large economies."
The supply chain challenge
Fredrik Erixon, director of the European Centre for International Political Economy, explains the practical challenges with noticeable calm and care.
"It's not that easy to impose this kind of restriction... Europe also imports a lot from other countries, which European companies use to export further to other countries. So if you impose a restriction, it will lead to increased costs for you. This will also increase the price of European exports," he said.
His example illustrates the crux of the problem: a German company building a solar farm in the United Arab Emirates, with components manufactured in different countries. In this case, the “European preference” becomes unclear, especially if the UAE government requires local production to award the contract.
"This is going to be very, very difficult to determine the exact details, [how this will work]," he said.
Erixon also highlights the challenge with allies. The EU exports more of these goods than it imports. If Europe excludes Canada, the UK or its Mercosur partners, they could react with similar restrictions, which would ultimately hurt Europe more.
"We need a credible partnership system that goes hand in hand with this, which allows allies and close friends to participate, so that we don't exclude them. Because if we exclude them, they will react with similar measures against us. In the end, we will be the net losers, because we export more of these goods to them than we import," he asserted.
What is expected next?
The European Commission's "Buy European" proposal, which is expected to be presented in mid-March, will focus on selected strategic sectors, with tiered thresholds of EU value added - perhaps 60-80 percent - and an exemption for reliable partners among allied countries.
Nine member states, including Sweden, Finland, Ireland and Estonia, have already warned in a joint letter that any preference should be used as a measure of last resort, limited in time and sector-specific.
It appears that a political agreement has been reached, but the technical details have not yet been decided. /Telegraph/
