Opinion & Analysis

A new EU industrial deal with developing countries

In the third commentary of our series ‘To the new leaders of Europe’, Alfonso Medinilla and Chloe Teevan argue that the new EU leadership will need to think of ways to integrate connectivity and strong partnerships with Global South countries into its emerging industrial economic strategy to avoid reverting to a defensive ‘Fortress Europe’ mentality.

The wind is shifting on the EU’s approach to industrial policy. What started as a hesitant move, loosening the reins on member states’ ability to subsidise industries, has turned into a broad call for a new industrial deal, and even a European version of the US Inflation Reduction Act (IRA), providing substantial subsidies for green industrialisation.

The EU will need to respond to domestic demands to strengthen Europe’s industrial base in key strategic areas. But it will also need to flesh out the external dimension of this emerging approach to Europe’s industrial and economic future.

The EU depends on partners in the Global South for resources, energy and markets and as allies in multilateral fora. Deep connectivity and strong partnerships with those countries will therefore need to be one of the pillars of the EU’s emerging industrial and economic strategy. Without this, the EU risks falling back into defending an ever diminishing economic Fortress Europe.

About the Authors

Alfonso Medinilla is the head of ECDPM’s climate action and green transitionteam. He focuses on the geopolitics of the global green transition and renewable energy.

Chloe Teevan is the head of ECDPM’s digital economy and governance team.

Access the original publication here