The Return of Industrial Policy in the EU : A Chance for Central and Eastern Europe?

Abstract

This contribution explores the Visegrad four's (V4) responses to the revival of industrial policy in the European Union (EU). To a region so highly industrialised, and so dependent on foreign firms, this revival brings mixed blessings. Industrial policy focused on ‘European champions’ is driving investment towards core regions and firms, possibly at the expense of the peripheries. At the same time, emphasis on European value creation and production networks could open new opportunities for the region's sputtering growth model. In analysing the V4 policy‐makers' response to two instruments – Important Projects of Common European Interest and Foreign Direct Investment (FDI) screening – we find that they are keenly aware of both threats and opportunities created by the EU‐level industrial policy, but that few take steps to actively shape these instruments. If they do, they typically push them back towards traditional liberal market principles. We argue that, despite a powerful rhetorical pivot towards ‘open strategic autonomy’, EU industrial policy remains constrained not only by remnants of ideological liberalism but also by the fact that many smaller members see little opportunity in the more proactive supranational industrial policies and prefer to cleave to the liberal status quo at the EU level – even when domestically they embrace very different principles.