One year after the Draghi report, the European Commission is embarking on a dangerous path: abandoning the environmental objectives of the Green Deal in the name of short-term competitiveness, while failing to guarantee the Union’s strategic autonomy or economic security.

Under the guise of administrative simplification, what is actually taking place is genuine deregulation. The Commission’s first measures reflect trade-offs that are systematically unfavourable to the climate, the environment and social justice. The result: Europe is moving no closer to any of its objectives — neither ecological nor economic. The Commission is offering a false choice between competitiveness, economic security and the environment, when an integrated approach is indispensable.

The Draghi report itself called for greater coherence between the Union’s economic, trade and financial policies. Yet the European Commission has not yet translated this call into action. Tools already exist to reconcile ecological transition and competitiveness. The current industrial momentum opens a window of opportunity: the European Union is relaxing its competition doctrine and equipping itself with the means for a more strategic economic policy.

This note examines the real coherence and effectiveness of the proposed policy mix, and sets out proposals to enable the European Union to reconcile its climate, environmental and competitiveness objectives.

Six levers for a sustainable European Industrial Policy

1- Steer industrial policy by integrating economic, environmental and social dimensions
2- Make public support conditional on environmental and social criteria
3- Cooperate on European industrial projects aligned with the transition, such as the small electric vehicle
4- Green public procurement to drive industrial transformation
5- Make full use of the new trade defence tools and ambitiously implement all the instruments of the Green Shield (strengthened requirements for access to the EU market)
6- Increase and strategically direct public and private investment