The European economy is in a deep crisis. In order to save the local industry from extinction, instruments of protectionism are coming into focus in Brussels.
02/12/2026, 10:2102/12/2026, 10:21
Remo Hess, Brussels / ch media
The EU is desperately trying to free itself from the economic woes. It does not shy away from instruments of protectionism. At their informal meeting at a castle in Alden Biesen, Belgium, the heads of state and government discussed this week how to specifically give preference to EU companies over foreign competition.
French President Emmanuel Macron has been calling for more homeland security for Europe’s industry for years and now sees this confirmed.Image: keystone
The background is dramatic. Europe’s industry has been losing ground for years. Compared to China and the USA, their share of global value creation has shrunk significantly. The pandemic and the Russian attack on Ukraine have accelerated developments. High energy prices, weak demand and growing dependencies on Asian supply chains are affecting European companies. In Germany, around 150,000 industrial jobs were lost last year alone – jobs that once gone hardly ever come back.
Mario Draghi had already warned two years ago: “If we don’t act now, we will face a slow death.” The former president of the European Central Bank (ECB) presented a report on behalf of the EU with over 300 reform proposals to strengthen Europe’s competitiveness. But only a fraction of it was implemented. Since then, the situation has worsened further.
China’s export glut is crushing European industry
Brussels’ first reaction to the crisis was a free trade offensive. While US President Donald Trump unpacked the tariff hammer in Washington, the EU concluded trade agreements with the South American Mercosur states and India. At the same time, it initiated a reduction in bureaucracy, which is intended to relieve the economy of around 15 billion euros annually.
US President Donald Trump.Image: keystone
But that’s not enough to turn things around. France in particular is calling for a fundamental change of course. President Emmanuel Macron warns that Europe could soon be “swept away” in global competition. His answer for years has been: “A Europe that protects.” What is meant is a more active industrial policy – including sealing off strategic sectors from highly subsidized competition from China.
In fact, concerns about Chinese dominance are growing. Beijing achieves massive export surpluses, controls large parts of the processing of rare earths and subsidizes its key industries with billions from the state budget. When China restricted the export of certain raw materials last October, European car factories faced a halt to production. By then it became clear how dependent Europe had become on key intermediate products from China.
Do not send European tax money to foreign companies
Against this background, a concept called “Buy European” is gaining support. The idea: Where European tax money is used, European providers should be given priority. This affects an enormous volume – the EU states spend around 2,000 billion euros annually on public procurement.
The focus of “Buy European” should be on strategic future industries, such as batteries or green technology. For example, it would be stipulated that state-subsidized electric cars would have to consist of a prescribed proportion of purely European components.
That would not be a radical break with current trade policy. The USA has had similar rules with the “Buy American Act” for decades, China is pursuing an aggressive industrial strategy with “Made in China 2025”, and Canada is also relying on national preferences. What would be new, however, would be for the EU to move away from its previously very open approach. Or in plain language: If everyone else no longer plays by the rules of free trade, the EU no longer wants it either.
What does “European” mean – Switzerland inside or outside?
The traditional French position has gained support. But “Buy European” is still far from being decided. Germany and several northern European countries are pushing for the narrowest possible structure. They fear higher costs, loss of efficiency and trade conflicts with important partners. A too extensive isolation could end up hurting European exporters themselves. Proponents like France argue that the previous export model has failed. In order to free ourselves from global dependence, our own industries must be specifically established in critical areas.
The project is explosive for Switzerland, which is not part of the EU but is closely linked to the internal market. Bern already came under pressure with the steel tariffs recently imposed by the EU. At the World Economic Forum in Davos, Federal President Guy Parmelin complained to EU Commission President Ursula von der Leyen about this. “I told her: It doesn’t work that way,” said Parmelin in an interview with “NZZ am Sonntag”. Since then, Swiss diplomacy has been fighting at all levels to ensure that any “Buy European” rules do not come at the expense of local companies. With a view to the new package of bilateral agreements, which is expected to be voted on in one to two years, it is crucial that Switzerland is not treated worse than the EEA states Norway, Iceland and Liechtenstein.
Federal President Guy Parmelin.Image: keystone
Switzerland can argue that it not only has a free trade agreement, but also a public procurement agreement with the EU, which is intended to ensure non-discriminatory access to the European procurement market. However, at Switzerland’s explicit request, both are not part of the new modernization package. (aargauerzeitung.ch)