The European Commission (EC) is set to introduce new regulations next week that are expected to require companies operating in strategic sectors to manufacture products within Europe if they wish to access public funding. This move aims to bolster the EU's industrial capacity, but it has sparked significant debate among member states about what constitutes 'European preference.' Some countries, notably France, advocate for a strict adherence to the principle of 'made in Europe,' while others, like Germany, suggest a more flexible approach of 'made with Europe,' emphasizing cooperation and shared supply chains.

French President Emmanuel Macron has defended the proposed rules, asserting that they are intended to 'protect our industry' without veering into outright protectionism. He highlighted the necessity of safeguarding key sectors, including clean technologies, chemicals, steel, automotive, and defense, indicating that failure to do so could leave Europeans at a competitive disadvantage. His remarks underscore the concern that without a strong industrial policy, European manufacturers may be overtaken by global players, putting jobs and innovation at risk.

However, the push for these new rules faces criticism from free trade proponents among other EU member states. For instance, Swedish Prime Minister Ulf Kristersson has expressed strong opposition, arguing that such measures could lead to protectionist practices that might harm the EU’s integrated market. The ongoing discussions reflect a broader tension within the EU regarding the balance between protecting domestic industries and maintaining fair competition in the single market, raising questions about the future direction of European industrial policy.