Nils Redeker

Agree. The question of whether all the sectors currently in the IAA actually deserve additional spending is one we should have in the coming weeks.

Right, but I think this only applies to public procurement. For other support schemes, the rule is FTA partners only.

So US-produced vehicles could qualify in procurement but be excluded from purchase bonuses or other subsidies - correct?

Thanks for the pointer on AI in public procurement - good point. Don’t know enough about the sector to judge whether that would work.

Faster permitting is always welcome but also probably not the main bottleneck for most high-tech manufacturing I assume.

And I don't think the IAA would have been the right place to announce new EU support schemes. That requires fresh money, which will only be decided in the next MFF.

But in many of these cases, what you really need are classic supply-side tools to support infant industries.

Could be wrong on quantum chips - curious if anyone has high-tech sectors in mind where IAA like measures help.

So the kind of local content requirements the IAA puts forward don’t really fit as tools to support them.

Completely agree that we need a much stronger focus on high-tech, frontier sectors.

I think the same applies to @shahinvallee.bsky.social point on quantum chips. These are neither bought by governments at scale, nor is their deployment - or that of downstream products containing them - currently subsidised.

Agree in principle, but I’m not sure the IAA has the right instruments for many high-tech sectors.

Its main levers are local content requirements in both public procurement and demand-side subsidies for deployment.

But governments don’t buy many robots and they rarely subsidise their deployment.

Agree on the sectoral scope - nothing on future technologies is a blow.

On this one - I think it is politically smarter to start with a broad list and then narrow it down via delegated acts. Much harder to ask member states to hand over the discretion to build a positive list to the Commission.

A good thread by @nilsredeker.bsky.social but I disagree with his optimistic assessment of the @ec.europa.eu IAA. A quick thread :

New piece on Chinese tech investment in Europe — fittingly out the day the Commission publishes the Industrial Accelerator Act, kicking off months of legislative wrangling.

A look at the data and recent cases shows Europe has learned to block Chinese takeovers of tech & semiconductor assets.

1/

Great thread.

What astonishes me is that these Buy European clauses are supposedly covered by the EU's legal powers.

🧵
Trump wanting to cut all trade ties with Spain over use of US military bases is getting attention and some say Merz should've piped up more strongly.

For now, it's mostly rhetorical pressure ('waffle'), so the damage is limited. If it becomes any more concrete, the EU must decisively rebuke.

I would argue that it is politically much smarter to start with a broad list and narrow it down vial delegated act that to try to do it the other way round.

Industrial Accelerator Act Industrial Accelerator Act Regulation

Here's a link to the proposal: single-market-economy.ec.europa.eu/publications...

And I would - for the love of God - urge negotiators to finally drop the idea that Europe should not all but welcome cheap Chinese solar panels, which pose little risk and make decarbonisation far cheaper.

Thankfully, we can now all look forward to several months of negotiations to figure this out.

Similarly, the price tolerance for Union-content and low-carbon criteria is tight: 25% for public procurement, 25% for clean tech schemes, and 30% for other sectors.

That matters because Chinese technologies are often ~40% cheaper - making these thresholds a key battleground in negotiations.

Done right, this could be a first big step toward Draghi’s vision of a unified EU industrial policy.

That said, not everything is settled. In practice, much will depend on how far the Commission is willing to trim the list of eligible partners - for example if they pose a risk of CHN transhipments.

So overall, it’s good that this proposal is finally (!) out and I would argue that it does provide a solid basis for negotiations.

Crucially, it also stays close enough to Germany’s red lines for Berlin to play a constructive role in the talks

This is actually quite smart. Many of the EU’s major trading partners - like Canada, Japan, South Korea - already run their own versions of local content rules.

The IAA could now become a tool to negotiate reciprocal openings among trusted partners.

So, the baseline would be that all 76 FTA partners qualify. Countries without an EU trade deal - like the US or China - would be excluded.

Crucially, however, the Commission could narrow the list further via delegated acts, for example, if partners keep their subsidy schemes closed to EU content.

The second piece of good news: the new local content rules would not wall the EU off from its trading partners.

Under the Commission’s proposal for a “Union preference,” all countries with which the EU has a free trade agreement would count as local content.

That list isn’t perfect.

Europe’s industrial future arguably hinges much more on digital technologies than say on cement - and in some clean tech areas it would be foolish not to welcome cheap CHN imports.

But local content rules are complex and consequential. Starting narrow is the right call.

The first good news: the list of “strategic sectors” is kept relatively narrow.

In recent weeks, everything from chips to robotics had been floated. The proposal now focuses on just three areas: energy-intensive industries, (electric) automotive, and clean tech.

To achieve this, the Commission wants to link access to public procurement and support programmes to local content and low-carbon criteria.

In practice: manufacturers in some "strategic" sectors will need to localise parts of their production in Europe to qualify for public contracts or subsidies.

For context: the proposal never says it outright, but the IAA is essentially a lex China.

Chinese overcapacities are hitting EU industry everywhere - in China, in third markets, and increasingly at home.

The proposal now aims to push back by steering more EU demand toward EU production

After months of wrangling and an epic list of delays, the Commission has finally released its Industrial Accelerator Act.

This could turn into one of the EU’s most consequential industrial policy files in years - and the proposal is honestly not a bad place to start.

Some quick thoughts:

IAA (finally) out

FDI conditions are lex China pure, covering investments >100m from countries with >40% global production share in
i) batteries
ii) EVs
iii) solar
iv) critical raw materials

Industriepolitik: EU schwächt Buy-European-Vorgaben ab Die EU-Kommission will mit „Made in Europe“-Leitmärkten die heimische Industrie schützen. Doch entscheidende Sektoren werden nun ausgenommen.

"'Die aggressive Industriepolitik Chinas setzt europäische Unternehmen massiv unter Druck', sagt Ökonom @nilsredeker.bsky.social vom Jacques Delors Centre. Daher sei es richtig, dass die Kommission europäische Präferenzen in strategischen Sektoren vorschlage." 👉 www.handelsblatt.com/politik/inte...

Das war ein Meilenstein: Präsident Macron hat eine "vorgerückte" französische Abschreckung (dissuasion avancée) verkündet. Deutschland ist privilegierter und ambitioniertester Partner, andere europäische Länder ebenfalls dabei.

Hauptpunkte 🧵