As the European Union prepares new rules to bolster its industrial base against Chinese competition, a fundamental disagreement has emerged among member states over a seemingly simple question: what should count as “Made in Europe”?
The European Commission’s proposed Industrial Accelerator Act would grant preferential treatment in public procurement to products—including cars, steel, and green technologies—that are deemed European-made. But the definition of “European” is proving contentious, with France, Germany, and Spain staking out very different positions.
France’s strict line vs. Germany’s open approach
France is pushing for a strict interpretation, limiting the preference to goods produced within the EU’s 27 member states. Paris argues that the act should serve as a clear tool to strengthen the bloc’s own manufacturing capacity and reduce dependence on external suppliers.
Germany, however, advocates a more expansive model. In a position paper, Berlin suggests that rules of origin should be extended to trading partners—provided those countries grant European companies equivalent access to their own public procurement markets. This could include signatories to the WTO Agreement on Government Procurement (GPA), as well as nations with free trade agreements or customs unions with the EU.
“The Industrial Accelerator Act, from our point of view, must follow a principle—made with Europe,” said Katherina Reiche, Germany’s Minister for Economic Affairs, ahead of a meeting of EU industry ministers. She specifically mentioned Norway and Switzerland as potential partners, along with “partner countries” like Canada, which European Commission President Ursula von der Leyen has offered a privileged partnership.
Last week, von der Leyen proposed in her State of the Union speech that Canada be granted “associate” status within the EU, as Ottawa seeks closer ties with Europe amid its trade war with the United States. That proposal has added a geopolitical dimension to the debate over what constitutes “European” production.
Spain’s compromise proposal
Spain has stepped in with a compromise designed to bridge the Franco-German divide. In its own position paper, Madrid suggests a three-tier system for European preference.
The first tier would be the EU’s 27 member states, where the bloc should focus on reinforcing productive capacity. The second would include European Economic Area countries such as Norway, plus trusted partners that offer reciprocal access to public procurement. The third would cover nations with free trade agreements or customs unions with the EU, as well as GPA signatories.
“We have made a proposal that establishes without a doubt the reinforcement of the European Union of the 27, as the specific area where it is necessary to reinforce the productive capacity in Europe,” said Spain’s Industry Minister Jordi Hereu i Boher. “But at the same time, I believe that we perfectly delimit what we call open strategic autonomy, in cooperation and in collaboration with other areas of the world and other countries.”
The Spanish paper also suggests that third countries producing components deemed “critical” for the EU’s economic security could be included, where justified by a “current lack of sufficient Union manufacturing capacity” or alternative sources of supply.
Italy and Ireland weigh in
Italy, the EU’s third-largest economy, has yet to take a firm stance. Minister for Enterprises Adolfo Urso said he favored a European preference open to “strategic partners,” but offered little detail.
“We believe we need to start from the industrial base of the 27 member states, with an inclusive and balanced approach, both in terms of safeguarding industrial value chains and with regard to the strategic partners of our continent, whom we need to include in our industrial policy strategy,” Urso said.
Ireland, which holds the rotating EU Council presidency until the end of the year, hopes to broker a compromise among the 27 by December. The outcome will shape not only the Industrial Accelerator Act but also the broader debate over Europe’s economic security and its relationship with key allies.
The dispute echoes other recent EU policy battles, such as the ECB’s push for stricter crypto rules, where member states have struggled to align on the right level of openness versus protection. It also comes as the bloc works on national roadmaps for the 2045 fossil fuel exit, another area where national priorities often clash.
For now, the question of what counts as “Made in Europe” remains unresolved, but the debate is far from academic. The answer will determine which companies benefit from billions of euros in public contracts—and how Europe positions itself in a world of intensifying competition.
