This contribution was the Topic of the Week in the newsletter of week 13 (2026).

With the "Industrial Accelerator Act" (IAA) presented on March 4, the EU Commission aims to strengthen industrial value creation in Europe and increase the share of processing industries to at least 20 percent by 2035. To achieve this goal, the demand for CO₂-neutral, Europe-made industrial products and net-zero technologies is to be boosted – for example through requirements for public procurement and subsidies. At the same time, foreign investments in Europe exceeding 100 million euros will be subject to review and joint venture rules if such investments originate from countries accounting for more than 40 percent of global production capacities for electric vehicles, batteries, solar systems, or critical raw materials. These planned EU requirements may seem understandable in light of protectionist competitors in global markets. However, they raise fundamental questions: Can long-term growth be achieved through these initiatives? And what justifies interventions in entrepreneurial freedom?

Bright spot: faster approval processes  

The approach to accelerate approval procedures for industrial projects is to be evaluated positively. However, some of the relief measures are supposed to apply only to energy-intensive sectors. The positive effect would be greater if all businesses had to spend less time and resources on such processes. The idea of having member states designate zones for certain industries within which approval processes are supposed to be less cumbersome could also contribute to acceleration. Still, it would be even more effective to make corresponding procedural reliefs accessible to the wider economy while simultaneously streamlining the entire regulatory framework.

Challenges: costs, bureaucracy, and trade conflicts

The Commission's planned introduction of minimum EU-added value and climate-friendly requirements for public procurement and funding selected sectors does not come free of charge. Additional requirements, bureaucratic proof of origin, and potential counter-reactions from trade partners place a burden above all on small and medium-sized enterprises. Current DIHK survey shows that three out of four businesses expect noticeable effects of "Buy European" measures on their operations. Their primary concern is additional bureaucracy: more than half of respondents anticipate additional effort due to proof of origin, 43 percent expect higher production costs, and 36 percent fear counter-reactions from trade partners along with the diminished access to crucial third-country markets. Those who want to strengthen Europe should not alienate significant partners.

Involving businesses early

The IAA will soon be discussed by member states and the EU Parliament. Businesses should be included in the decision-making processes to minimize interventions in entrepreneurial freedom. Comprehensive impact assessments focusing on small and medium-sized enterprises along with consultations involving the wider economy are essential. The primary focus should be on increasing Europe's competitiveness, reducing bureaucracy, and facilitating investments – instead of impeding them with new barriers.