Paris and Berlin Push for Tighter ‘Made in Europe’ Subsidy Rules

Germany and France have proposed a new regulatory framework requiring automotive manufacturers to shift production and research and development activities into the European Union to qualify for public subsidies and procurement contracts. The proposal mandates that the "Made in Europe" classification be restricted to the 27 EU member states, with limited exceptions for partners integrated into the single market as of January 1, 2020.

This policy shift targets foreign automotive firms, specifically increasing pressure on Chinese manufacturers to localize operations within the bloc to maintain market competitiveness. By linking financial incentives to regional industrial presence, the initiative aims to protect domestic manufacturing capacity and secure supply chains against external competition.

The adoption of these criteria marks a significant hardening of European industrial policy. It signals a move toward protectionist measures intended to force foreign entities to commit to long-term capital investment and technology transfer within the European market.