In today's geopolitics of supply chains, Europe must adapt to the new global realities.

Since the beginning of this mandate, we have developed an industrial policy that supports the twin transition to a green and digital economy, makes EU industry more competitive globally, and increases the resilience of our Single Market.

In areas as varied as batteries, hydrogen, semiconductors and raw materials, our approach has been the same and is yielding results in terms of building partnerships (among industrial players, researchers, public authorities, and even global actors where appropriate), identifying project pipelines, mobilising private and public funding, and addressing regulatory challenges.

Now the time has come to take these efforts to the next level to increase Europe's strategic autonomy – including by mobilising the necessary funding.

Our new assertive industrial policy is yielding results – and we will continue building on it.

The EU Chips Act is a landmark in this new industrial policy approach. For the first time, we are combining the EU budget to support both research and innovation and production, coordinating Member State investments to ensure that cutting-edge technology production happens in Europe, modifying State aid rules to facilitate these investments, and introducing a new governance for crisis management to keep our supply chains – and our single market – open.

Industrial alliances have proven to be a very effective tool that is already yielding tangible results, especially in making sure that excellence in research is translated into industrial capacity and technological innovation.

On batteries, for example, where the goal is to develop capacity to meet 70% of expected demand in 2025 and 90% in 2030, we have generated three times more investment (mostly private) than China in the last few years, with two IPCEIs launched and 20 mega-fabs coming up. We have also proposed a new EU regulation to help establish the full batteries value chain in the EU.

To meet our renewable targets in Europe — and avoid replacing a dependency on Russian fossil fuels with a dependency on Chinese solar energy — we are launching an industrial alliance for solar energy. The alliance will aim to foster an innovative and value-creating industry in Europe which leads to job creation here.

And on hydrogen, we are stepping into a completely new industrial dimension. We now have a pipeline of 750 projects ready to emerge by 2030, and the 70-80 game-changing projects encompassed by two ongoing IPCEIs will boost European industrial supply and demand like never before. And I welcome the announcement by President von der Leyen of the creation of a European Hydrogen Bank to match supply and demand and move the hydrogen economy from niche to scale.

In light of the security challenges brought by the Russian invasion of Ukraine, we are also working to adapt our defence industry to the realities of the return of high-intensity conflict on our continent. This means massively increasing our manufacturing capacity for key defence capabilities such as air defence systems, MANPAD and ammunitions. It also implies developing mutualised dual infrastructures like the secured connectivity constellation to ensure Europe's resilience and independence for connectivity, which is now well on track.

And of course, we will present the Critical Raw Materials Act announced by President von der Leyen to ensure the secure and sustainable access to the raw materials without which our industrial and twin transition ambitions and our collective resilience are at risk.

Time to get serious about financing

If we are serious – and we are! – about becoming the first climate-neutral continent by 2050, we need to discuss the infrastructure needed to ensure the right power generation and the right interconnection between our Member States. We need to invest massively in the energy mix transformation taking into account the diverse starting points of our Member States and generating the required solidarity.   

When it comes to digital, Europe's resilience will depend on our ability to develop the next generation of cloud and edge capacities and invest massively in developing European alternatives to reduce our current dependencies. We also urgently need a strong cyber shield for Europe with an EU infrastructure of interconnected security operational centres to faster detect potential attacks and react jointly – a cyber equivalent of our border and coast guards.

On defence, the EU instrument on common procurement we presented in July to reinforce European defence industrial capacities — while an important step — is admittedly of small magnitude in terms of budget. To live up to our ambition, we need to put our money where our mouth is and mobilise a much more significant budget.

And to think outside of the box

With all these challenges ahead, and with a constrained EU long-term budget (the Multiannual Financial Framework – MFF), we need to think outside of the box to find ways to finance collectively the strategic investments needed to ensure our resilience: be they European infrastructures, advanced technologies, manufacturing production sites in Europe, equity investment for companies, especially the many SMEs that are central to our sovereignty.

Because today, we lack the tools to support the SMEs and start-ups which are critical to secure our supply chains, especially in strategic sectors such as clean tech.

With her announcement of an EU Sovereignty Fund, President von der Leyen is taking a bold and necessary step to make sure that the future of industry is made in Europe.  

In my view, the future Sovereignty Fund must be granted with the right budgetary means to be credible. Its design should allow for direct, fast and flexible budgetary support to well-identified projects of interest for EU sovereignty across any sector of our industrial spectrum.

This Fund could be used to address critical dependencies and/or to top up specific industrial projects supported through IPCEIs to accelerate their implementation and improve European autonomy.

It should also play an important role in preserving the integrity of the Single Market by collectivising investments, while maintaining a necessary level playing field between Member States who do not have the same fiscal space to help de-risking investments in future technologies and industrial production capacities.  In this respect, I believe that we should consider the possibility to finance this Fund through common debt, like we successfully did with NextGeneration EU.

In drawing up our industrial, economic and geopolitical ambitions, we of course need to consider the rest of the world, including how our so-called “like-minded partners” are ramping up in the industrial and technological race that is taking place. The Buy American Act, the US Chips Act, the Defence Production Act and most recently the Inflation Reduction Act are all examples of determination and audacity.

While I do not suggest we emulate these word-for-word, given the EU's openness and commitment to international trade, let's not be naïve. It is high time we show more assertiveness – including the necessary financing – to defend our European strategic interests.