Earlier this month in Antwerp, the President of the French Republic, Emmanuel Macron, once again gave his familiar sermon. Europe would need an “industrial strategy”. More coordination. More joint investment. More ‘strategic autonomy’. And, of course, with reference to the much-discussed Draghi Report as intellectual justification.
Europe lags behind the US in terms of productivity. Capital markets are fragmented. Energy is expensive. Innovation is slower. Entrepreneurs are drowning in regulations.
But the proposed remedy is precisely the problem.
The Cost of "Strategic Autonomy'
Not the least of the problems associated with strategic autonomy is that it is likely to prove expensive. That could, embarrassingly, be very tricky for France (among others). It has an almost American-sized debt/GDP ratio of 117 percent (nearly…
— Andrew Stuttaford (@AStuttaford) February 19, 2026
More central control from Brussels is no substitute for freedom at the grassroots level. You cannot cure economic stagnation with additional layers of policy. You cannot create entrepreneurs by setting up new task forces. You cannot beat Silicon Valley with yet another 300-page strategy paper.
Industrial politics sounds pragmatic. In reality, it means that politicians choose sectors and technologies. Batteries, chips, hydrogen, AI, whatever is trendy today. It means that taxpayers’ money is used to finance political bets. That lobbyists win and outsiders lose. That risk is socialised and profit is privatised. That is not a free market, that is cultivated corporatism.
Europe does not suffer from a lack of planning, but from an excess of interference.
High labour costs. Rigid labour markets. Compliance costs that are growing exponentially. ESG reporting. Double standards. Energy policies that destroy affordable baseload and then subsidise the damage. Wealth taxes that discourage entrepreneurs from building for the long term. And then we are surprised when capital and talent leave for the US.
If one thing is a "disaster", it's French industrial policy:
– Plan Calcul (1966-1975): Honeywell buying up most of the would-be champions
– Plan 3T: create a European consumer electronics industry
– New video standard (V2000) https://t.co/KfW48F0KLahttps://t.co/PxXCP9r1z2— Pieter Cleppe (@pietercleppe) October 24, 2019
If you want competitiveness, start with property rights, predictable rules and lower taxes. Deep capital markets are created by removing barriers, not by setting up a new central fund in Brussels. Allow failure to be possible. Let prices signal scarcity. Let entrepreneurs invest on the basis of profit and loss, not on the basis of political preference.
The Draghi report rightly points to fragmentation and lack of scale. But scale imposed from above is different from scale that arises from voluntary cooperation. Real scale comes from integrated markets, not from integrated ministries.
Good to see that the ridiculous EU carbon market is rising up on political agendas.
Yesterday, at a heavy industry summit in Antwerp, both Merz & Macron criticized it for high carbon prices that undermine the competitiveness of sectors such as chemicals or paper. The price then… pic.twitter.com/FGHWOWHXL1
— Alexander Stahel 🌻 (@BurggrabenH) February 13, 2026
Europe became great thanks to trade, competition and decentralised experiments. Now we are told that survival is only possible through technocratic control.
Industrial policy is a neat term for the political allocation of capital. And political allocation always follows power.
If Europe wants to compete with the US and China, it should not do so with state capitalism. It must rediscover its liberal roots.
Less choreography in Antwerp. More freedom in the market. Competitiveness is not designed. It is unleashed.
Originally publishedin Dutch on X.
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