The European Union Industrial Strategy: Reconciling Competition and Geoeconomic Challenges
The EU’s basic assumptions, on which it grounds its economic and trade power, are being steadily cast into doubt. The EU’s main trade partners, the US and China, increasingly set their sights on securing their supply chains, which may further a potential decoupling.
This shift is likely to be accelerated in the context of growing geopolitical instability. Multilateralism and international trade principles are increasingly challenged by a weakening of international institutions and the recourse to asymmetric market practices, while technological leadership will be key in the struggle for global leadership. Being fundamentally built on economic openness, the EU is comparatively ill-equipped to respond to these developments. Its biggest economy, Germany, is prompted to assert itself if it does not want to lose in competitiveness. While the EU is developing strategies, policies, and instruments to adapt to this change of circumstances and increase its resilience, a shift in mentalities, leaving behind political and economic short-term interests, will be necessary.
Marie Krpata works as a Research Fellow at the Study Committee on Franco-German Relations (Cerfa) at the French Institute of International Relations – Ifri where she dedicates her research activities to the European Union and the external relations of the Franco-German couple. Before joining the Cerfa she worked in non-governmental and international organizations as well as in consultancies.
Download the full analysis
This page contains only a summary of our work. If you would like to have access to all the information from our research on the subject, you can download the full version in PDF format.
The European Union Industrial Strategy: Reconciling Competition and Geoeconomic Challenges
Author(s)
Marie KRPATA
Research Fellow, Study Committee on Franco-German Relations (Cerfa), Ifri
Related centers and programs
Discover our other research centers and programs
The Study Committee on Franco-German Relations (Cerfa)
The Study Committee on Franco-German Relations (Cerfa) was created in 1954 by an inter-governmental agreement between the Federal Republic of Germany and France, in order to raise awareness of Germany in France and analyze Franco-German relations, including in their European and international dimensions. In its conferences and seminars, which bring together experts, political leaders, senior decision-makers and representatives of civil society from both countries, Cerfa develops the Franco-German debate and stimulates political proposals. It regularly publishes studies through two collections: Cerfa notes and studies as well as Franco-German visions.
Cerfa maintains close relations with the network of German foundations and think tanks. In addition to its research and debate activities, Cerfa promotes the emergence of a new Franco-German generation through original cooperation programs. This is how in 2021-2022, Cerfa led a program on multilateralism with the Konrad Adenauer Foundation in Paris. This program is aimed at young professionals from both countries interested in the issues of multilateralism in the context of their activities. It covered a wide range of themes relating to multilateralism, such as international trade, health, human rights and migration, non-proliferation and disarmament. Previously, Cerfa had participated in the Franco-German future dialogue, co-led with the DGAP from 2007 to 2020, and supported by the Robert Bosch Foundation and the Daniel Vernet group (formerly the Franco-German Reflection Group) which was founded in 2014 upon the initiative of the Genshagen Foundation.
Find out more
Discover all our analyses
France-Germany: Overcoming Differences to Strengthen European Sovereignty
The Franco-German “reset” launched with Friedrich Merz’s appointment as Chancellor in May 2025 and given concrete form at the Franco-German Council of Ministers (FGCM) in Toulon in August 2025 was intended to address the structural challenges affecting the bilateral relationship. Yet it is clear that these ambitions have only been partially translated into concrete action. Since the beginning of 2026, Franco-German relations have entered a phase in which short-term challenges have combined with deeper divergences over priorities, policy approaches, and strategic culture.
Under construction: Europe’s economic repositioning in a fragmented international order
„Under Destruction“– this was this year’s motto at the Munich Security Conference. A motto that applies both to security and economy in an increasingly fragile international system. In 2024, Mario Draghi’s report on the EU’s competitiveness rang the alarm bell: Europe is slipping behind the US and China, European companies struggle with Brussels' bureaucracy, and the internal market is too fragmented. However, two years later only about 15 % of his recommendations were implemented: the wake-up call was not heard.
Germany in the Shadow of the United States, Russia, and China – Systemic Paradigm Shifts
Since reunification, Germany has built its prosperity on an international order based on free trade, multilateralism, and geopolitical stability. This model relied on three relationships considered complementary: U.S. military protection, Russian energy supplies, and economic integration with China. For several decades, Berlin viewed these interdependencies as factors contributing to peace, growth, and security.
France and EU Enlargement: From Strategic Hesitation to a Geopolitical Shift
Paris has come a long way in its approach to enlarging the European Union. However, French support remains fragile, due in part to a lack of public support.