The upcoming European fracture could begin with a business decision as simple as where to set up a factory. The chosen territory will enjoy the investment, which generates higher economic expectations and brings it new jobs. But for the territories left out, perhaps it is another sign that Europe promises prosperity while opportunities go to others. The Industrial Accelerator Act, the European Commission’s proposal to revive European industry, hinges on that gap between the collective benefit and its territorial distribution. Accelerating industry matters. Determining who participates in that acceleration will also be decisive for the Union’s political future.
The proposal presented by the European Executive in March aims to stimulate demand for European, low-carbon industrial goods, streamline authorizations and foster areas of industrial acceleration. It also sets conditions for certain foreign investments. Its ambition responds to the vulnerability of a Europe that needs to preserve productive capacities in a context of strategic competition. But legislation conceived to strengthen the bloc can generate internal conflicts if its benefits depend excessively on the budget and influence of each State.
That’s where Spain enters the equation. As I noted a few months ago in another “European Compass”, renewables offer an opportunity to reshape the European industrial geography, but differences in fiscal capacity threaten to condition that shift. Energy can favor one location, while subsidies push another. And Europe faces a major risk when the competition to attract investments stops rewarding productive advantages to become a kind of auction of national treasures. In this case, we would be facing a European response to deindustrialization that would end up funding a dispute among Europeans.
Una legislación concebida para fortalecer al bloque puede generar conflictos internos si sus beneficios dependen excesivamente del presupuesto y la influencia de cada Estado
However, it would be a mistake to think that any investment in the South is a defeat for the North. The Union needs its capacities to complement each other. A new facility can boost the demand for machinery, services, or components produced in other countries. The relevant question is how much value it adds to the whole and how its benefits are connected. If every Government measures success exclusively by factories located within its borders, strategic autonomy will end up looking too much like economic nationalism.
Last week, at Yale’s Jackson School of Global Affairs, in a seminar to which I was invited by the IE Institute, I could listen to Economics Professor Lorenzo Caliendo. His explanations helped me understand why that threat deserves attention in the current context of transatlantic relations. Caliendo argues that US tariffs and the transatlantic trade agreement generate uneven effects across European economies and sectors. His estimates place Germany among the most harmed countries and anticipate manufacturing setbacks across much of Europe.
And politically? The consequences go far beyond the reduction in trade flows. Ultimately, the same decision negotiated by the Union can impose very different costs on its members: to some the agreement can provide predictability and to others it worsens their industrial difficulties. And within each country there will be regions far more exposed than others. That inequality does not mean that negotiating together is a mistake, but that common trade policy needs new instruments capable of managing these distributive consequences.
“Inequality does not mean that negotiating together is a mistake, but that the common trade policy needs new instruments capable of managing these distributive consequences”
Otherwise, Europe risks receiving two shocks. First, an external disturbance that harms specific activities. Then, a domestic response that benefits those who have more resources to protect themselves. And a vicious circle can be created because the second can amplify the first. An industrial region hit by tariffs and located in a state with little budgetary margin would compete at a disadvantage against the United States as well as other European regions. Here the single market would lose credibility precisely when it most needs to demonstrate its usefulness.
Caliendo offers a warning that applies to both the United States and the European Union: restoring production does not guarantee repairing the communities that lost jobs. For example, a new factory might be located far from the region left behind, use different qualifications and hire many fewer workers. Industrial policy must be able to distinguish between increasing productive capacity and providing opportunities to specific people. Both goals can reinforce each other, but they will not align unless work is done. Confusing them will lead to macroeconomic victories being announced while regions continue accumulating frustration with a rising distrust toward those who promised their economic recovery.
That is why we wanted to explore the regional dimension at the meeting organized by Agenda Pública in Brussels. In our panel, Miquel Sàmper, the Catalan Government’s Minister for Enterprise and Labour, insisted on moving from diagnosis to execution; Jaume Baró, the Secretary for Enterprise and Competitiveness, connected Catalonia’s industrial strategy to its territorial deployment. In our exchange we agreed on a shortcoming: regions, which know capacities and obstacles, can be left out of a negotiation articulated exclusively among capitals.
That knowledge should have budgetary consequences. Each of the strategic projects on the table should explain who their suppliers will be and how small businesses will access their opportunities. Evaluating it only by the announced investment could favor flashy deals whose roots may be limited. Instead, if we add an assessment of the capacities left behind, we can distinguish between attracting a facility and building a durable productive base. Europe should fund especially those that make possible the next investment, in addition to celebrating the first.
To that end, more than ever a common funding with transparent criteria is necessary. If industrial resilience is considered a European asset, its maintenance cannot rest solely on the possibilities of each national treasury. The community contribution should value cross-border connections, reduced dependencies and the costs of territorial adjustment. It should also require verifiable results. Sharing resources does not mean guaranteeing indefinitely any activity: it means avoiding that the selection of projects depends mainly on which Government can offer the biggest check.
“Sharing resources does not mean guaranteeing indefinitely any activity: it means avoiding that the selection of projects depends mainly on which Government can offer the bigger cheque”
Additionally, regional participation requires clear responsibilities. Incorporating administrations should not multiply bureaucratic windows or grant new vetoes. It should allow agreeing from the outset who will resolve each obstacle, with what resources and within what timeframe. An acceleration zone will have little value if authorization proceeds while essential matters for operation remain unresolved. The institutional commitment must cover the entire project journey and make visible where it stalls, so that accelerating has a tangible meaning.
It is also wise to avoid each territory claiming its own version of every strategic sector. Specialization requires choosing and cooperating, even when it is electorally less attractive than announcing another big factory. European incentives should reward projects shared between regions and penalize unjustified duplications. If two regions can jointly develop a capability, subsidizing their competition to reproduce it would be a poor use of public money. Cohesion is not about promising identical activities, but viable opportunities and useful connections.
For Spain, this perspective demands a strategy based on ensuring that new productive advantages expand European capacity and that the rules prevent neutralizing them through disproportionate national subsidies. It also seeks a viable transition for the harmed partners. A Union trapped in distributive disputes would have more difficulty sustaining common policies. Gaining industrial positions while weakening the framework that allows us to trade and invest together would be an incomplete victory.
“Ganar posiciones industriales mientras se debilita el marco que permite comerciar e invertir juntos sería una victoria incompleta”
Therefore, the success of the Industrial Accelerator Act should not be measured solely by inaugurated factories. We must look at its capacity to prevent each reconversion from becoming a conflict among partners. Tariffs can harm European industry; a poorly designed response can damage the very integration. Providing regions with means, responsibilities and participation would be a concrete way to protect both.
