Industrial policy in the EU: new opportunities, old risks?
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Article from Economic Bulletin 7/2026 on industrial policy in the EU: it can support productivity and resilience where market failures or dependencies are well identified, but it carries risks of distortion.
Key points
- Risks of rent-seeking and misallocation of resources, aggravated in a single market with heterogeneous institutions
- It will only be effective with credible governance and complementary structural reforms
Who is affected
EU economic policy
Plain-language version
An ECB article (the ECB is the euro area's central bank) looks at industrial policy, when governments back certain sectors or companies. It can boost productivity or reduce reliance on other countries, but it carries risks: money may go to whoever lobbies hardest rather than where it does the most good. It only works with credible management and supporting reforms.
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Summary produced with artificial intelligence from the official publication. It may contain errors: always check the original document.
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