The European Union stands at a critical juncture for its political and economic future. The Draghi report exposed a brutal reality: Europe’s climate ambition, though laudable, has operated in isolation from economic reality, risking systemic deindustrialization. In this fragile landscape, the European Commission’s proposal for an EU Industrial Accelerator Act (IAA) marks a radical paradigm shift, moving from the traditional role of a regulator to that of a „market maker.” The goal is ambitious: raising the manufacturing share of the EU’s GDP to 20% by 2035. However, this interventionist shock therapy comes not only with a complex set of strategic advantages, but also with major structural dangers.

On one hand, the advantages of the IAA address historic urgencies. Inspired directly by the Draghi Report, the IAA is built on four major pillars. The major priority, rightly addressed, is the radical de-bureaucratization under Pillar 1. Reducing permitting times to a maximum of 9-12 months and introducing a 45-day tacit approval for completed files slashes the administrative red tape that previously drove major investors away. The Industrial Accelerator Areas, to be designated by the Member States in 12 months of the enforcement of the IAA could really be game changers. The second major benefit is the creation of a guaranteed market (Pillar 2). By channeling public procurement (which accounts for 14% of EU GDP) toward sustainable „Made in EU” goods, with mandatory green thresholds of at least 25% for sustainable, low-emission aluminum and steel starting in 2029, the Union solves the „chicken and egg” dilemma. Private investors gain the certainty that expensive decarbonization technologies will have buyers. Furthermore, the economic defense pillar (Pillar 3), which enforces mandatory screening for Foreign Direct Investments (FDI) exceeding €100 million, provides a vital shield against asymmetric competition from major global players targeting the European markets by overcapacities or protectionist policies, including the US or China.

On the other hand, the dangers hidden in the details of this legislation could turn a noble intention into a massive failure. The first major risk is re-bureaucratization induced in parallel with (or disguised as) simplification. Think-tanks and European business groups warn that complex traceability systems for the „Made in EU” label could add a huge administrative burden. Moreover, a rigid protectionist policy such as capping foreign ownership at 49% or requiring a 50% European workforce for large investment risks leading to rising costs for consumers, raw material shortages, and trade retaliation at the WTO level.

Another fundamental danger is that the IAA treats symptoms rather than core causes. Creating artificial demand through regulation does not fix Europe’s major structural disadvantage: the soaring cost of baseload electricity. If energy inputs remain uncompetitive globally, demand-side mandates will only temporarily mask a chronic illness. Additionally, heavy reliance on future delegated acts to be produced by the European Commission leaves businesses in a state of toxic uncertainty.

As already mentioned, the IAA draws directly from the Draghi Report on the European competitiveness. It also reproduces some of the shortcomings of its inspiration source. From a regional perspective, a legitimate question arises: where is the geographic balance? The plan risks favoring only the large industrial champions in Europe’s core, leaving countries in Central and Eastern Europe on the periphery of its benefits. Traditional European cohesion policies will not be able to counter-balance such a shortcoming.

In conclusion, the Industrial Accelerator Act seems to embody a risky but necessary gamble. In the era of ever- increasing nexus between trade and security, furthering European strategic autonomy is not only legitimate, but urgent, too. Market instrumentalism is one way out of the current European competitiveness decay but does not in itself bear the guarantees of success. Indeed, no amount of wishful thinking can boost the Member States’ capacity or willingness to overhaul their administrations, nor the economic operator’s success in reconfiguring their supply chains. Much will depend on the EU’s flexibility to avoid turning an economic shield into an isolated, high-cost island fortress that suffocates the very global competitiveness it seeks to rescue.

Article by Iuliu Winkler published on Movers & Shakers The Romanian Leaders Platform