This blog post is based on an article published in El País on the 29th of March 2026. The original article can be found here.
On 4 March, the European Commission unveiled its proposal for the Industrial Accelerator Act. The draft legislation aims to stimulate demand for specific European-manufactured goods by embedding local-content requirements into both public procurement and foreign investment frameworks. Energy-intensive industries, the mobility sector, and raw materials are poised to be the principal beneficiaries of the Act – all traditional pillars of the European economy. However, basing industrial policy on a nostalgic desire to turn back the clock is not a sound strategy for forging Europe’s future.
Europe is advancing this strategy with a rather questionable objective: offsetting the impact of the Chinese economy on two distinct fronts. On the one hand, with the Asian giant firmly entrenched as the world’s factory floor, the Commission is determined to forestall the creation of new trade dependencies that might compromise the bloc’s strategic autonomy. On the other, there is mounting unease regarding China’s footprint as an investor in Europe. Brussels is concerned that Chinese enterprises will establish manufacturing operations within the EU, doing so via investments that yield negligible added value for its member states.
The central critique of this worldview – and of the Act’s underlying premise – is that it comes from an overly alarmist diagnosis. First, European industrial output as a whole has not contracted in absolute terms; rather, it has expanded across several economic variables. Nor have the specific industries the Act seeks to shield suffered any dramatic slump in activity.
The following four charts illustrate this unequivocally. Between 2008 and 2023, EU manufacturing as a whole, alongside the specific sectors targeted by the Act, such as paper, refined petroleum, chemicals, plastics, cement, basic metals, and motor vehicles, saw consistent growth in employment, turnover, value added, and productivity. While it is true that manufacturing has declined as a proportion of the EU’s overall GDP, as my colleague Erik van der Marel points out, this relative decline is driven by rising productivity and European industry’s broader shift towards services.
Figure 1: Number of persons employed in EU manufacturing and Industrial Accelerator Act targeted sectors (2008-2023)
Source: ECIPE. Industrial Accelerator Act targeted sectors C17 (Manufacture of paper and paper products); C19 (Manufacture of coke and refined petroleum products); C20 (Manufacture of chemicals and chemical products); C22 (Manufacture of rubber and plastic products); C23 (Manufacture of other non-metallic mineral products); C24 (Manufacture of basic metals); C29 (Manufacture of motor vehicles, trailers and semi-trailers)
Figure 2: Real value added in EU manufacturing and Industrial Accelerator Act targeted sectors (2008-2023)
Source: ECIPE. Industrial Accelerator Act targeted sectors C17 (Manufacture of paper and paper products); C19 (Manufacture of coke and refined petroleum products); C20 (Manufacture of chemicals and chemical products); C22 (Manufacture of rubber and plastic products); C23 (Manufacture of other non-metallic mineral products); C24 (Manufacture of basic metals); C29 (Manufacture of motor vehicles, trailers and semi-trailers)
Figure 3: Real turnover in EU manufacturing and Industrial Accelerator Act targeted sectors (2008-2023)
Source: ECIPE. Industrial Accelerator Act targeted sectors C17 (Manufacture of paper and paper products); C19 (Manufacture of coke and refined petroleum products); C20 (Manufacture of chemicals and chemical products); C22 (Manufacture of rubber and plastic products); C23 (Manufacture of other non-metallic mineral products); C24 (Manufacture of basic metals); C29 (Manufacture of motor vehicles, trailers and semi-trailers)
Figure 4: Real labour productivity in EU manufacturing and Industrial Accelerator Act targeted sectors (2008-2023)
Source: ECIPE. Industrial Accelerator Act targeted sectors C17 (Manufacture of paper and paper products); C19 (Manufacture of coke and refined petroleum products); C20 (Manufacture of chemicals and chemical products); C22 (Manufacture of rubber and plastic products); C23 (Manufacture of other non-metallic mineral products); C24 (Manufacture of basic metals); C29 (Manufacture of motor vehicles, trailers and semi-trailers)
The following table details the magnitude of these gains across the 15-year period. Crucially, 2008 was not selected to provide an artificially low baseline; as the effects of the financial crisis on the EU industrial sector materialised in 2009. 
Source: ECIPE. Industrial Accelerator Act targeted sectors C17 (Manufacture of paper and paper products); C19 (Manufacture of coke and refined petroleum products); C20 (Manufacture of chemicals and chemical products); C22 (Manufacture of rubber and plastic products); C23 (Manufacture of other non-metallic mineral products); C24 (Manufacture of basic metals); C29 (Manufacture of motor vehicles, trailers and semi-trailers)
Furthermore, whilst it is undeniably true that Chinese manufacturing has captured market share, this is a global phenomenon rather than a uniquely European one – and, to a certain extent, entirely predictable given the sheer scale of China’s economy. Ultimately, when scrutinising which critical goods supplied to the European economy originate in China and cannot readily be sourced from alternative markets, the list narrows considerably: it is largely confined to raw materials such as rare earths and specific active pharmaceutical ingredients (APIs).
Secondly, the Industrial Accelerator Act entrenches the prevailing European orthodoxy that, when it comes to shielding specific industries, domestic production at any cost is preferable to sourcing goods more cheaply from abroad.
The peril here is that, by legislating and tailoring incentives to this end, the Commission is engaging in the inherently risky business of picking winners. In its zeal to protect, Brussels is championing an economic architecture that fails to prize productivity, competitiveness, and innovation. Consequently, achieving the preposterous legislation’s target – boosting manufacturing’s share of European GDP from 14.3 per cent to 20 per cent by 2035 – will inevitably require shrinking the relative footprint of other economic sectors.
By doubling down on this strategy, the legislation creates a false sense of growth and stability in sectors whose relative importance is in systemic decline, and which have long ceased to be the primary engines of innovation. At the same time, the Act fails to bolster the segment of the economy that currently drives the lion’s share of productivity growth: digital technology and digital services.
The proportion of GDP Europe allocates to these technological sectors is substantially lower than the funds channelled into traditional industry. More troublingly, it pales in comparison to the financial firepower deployed by nations racing for dominance at the high-value-added technological frontier.
Ultimately, the Industrial Accelerator Act reflects a nostalgic economic vision, fixated on the past and reliant upon mid-tier technologies. While the EU pins its hopes on legacy sectors such as the steel and cement industries, global heavyweights like the US and China prioritise artificial intelligence and robotics. Indulging in a bit of nostalgia may occasionally hold some fleeting charm, but the EU would be far better served by fixing its gaze firmly on the horizon, competing for the future rather than protecting the past.