Eurozone: Strategic push reshapes dependencies – Rabobank

FXStreet Insights Team FXStreet

RaboResearch economists Maartje Wijffelaars and Leander Kalff outline how the European Union is intensifying efforts to strengthen Eurozone industry and reduce external dependencies. The report details measures to stimulate strategic sectors, raise trade-defence barriers, and diversify supply chains, while highlighting risks from US and Chinese retaliation and internal EU divisions that could slow implementation and affect Eurozone growth.

EU industrial strategy and trade defence

"Strengthening and protecting Europe’s industry has been high on Brussels’ policy agenda for some time now. The sector is under pressure from growing competition from China, high energy prices, and the short-term costs of decarbonisation. This weighs on current and longer-term economic growth."

"On top of incentivising the domestic industry, the EU wants to better protect its industry against “harmful” imports that undermine domestic industry."

"The European Commission and many member states explicitly want to remain an open economy, and they prefer dialogue with trading partners over protectionism. For example, the EU is currently engaging with China. However, at the same time, they are also exploring possibilities to make greater use of trade-defence measures."

"The European Commission, Commissioner Séjourné and member states want more options to protect the domestic economy against foreign trade. This includes both broader use of existing instruments as well as an expansion of the toolbox."

"Proposals from the European Commission are expected this autumn. Reaching an agreement and implementation will then still take time."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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