Mann im Haus der Deutschen Wirtschaft

"Buy European": Interference with Entrepreneurial Freedom

To strengthen European industry, the EU Commission plans to introduce "Buy European" provisions as part of the "Industrial Accelerator Act": Public contracts and grants will favor companies that produce locally within the EU. But is this the right approach? Klemens Kober, DIHK's foreign trade expert, analyzed this discussion in a radio feature.

During the SWR Culture Forum "Made in Europe – A New Opportunity for the Economy?" on March 3, Kober explained: "We are increasingly experiencing a competitiveness issue within Europe and also Germany." While the global economy grows, Germany faces stagnation, and global trade policy is evolving into power politics. "German companies can rely less and less on the global rules that were agreed upon," said Kober. Consequently, the German economy is increasingly understanding the importance of European preferences in security-related areas and critical infrastructure. However, not every part of the economy is strategically important.

While "Buy European" may initially sound reasonable, it's actually a "deep interference in entrepreneurial freedom," warned Kober. "This involves micromanagement of production and investment decisions." Such detailed regulations would create costs for companies, lead to bureaucracy, distort competition, and drive inflation. This needs to be carefully weighed, especially since third countries might adopt countermeasures.

Using the example of battery production, the DIHK expert highlighted the supply chains developed over decades, which cannot be changed overnight. Although the EU Commission's draft focuses on energy-intensive industries and net-zero technologies, the planned measures would impact all companies in the supply chains, requiring complex proof of origin. This would have "far-reaching consequences for a significant portion of the economy."

You can listen to the entire debate on SWR's website at www.swr.de/kultur.

Relevant in topic:
Key areas:
  • Bürokratie

Contact

Mann im Haus der Deutschen Wirtschaft

Klemens Kober

Director Trade Policy, EU Customs, Transatlantic Relations

Schraff, Susanne_test

Susanne Schraff

Spokesperson