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Europe in the Age of Industrial Policy

While China and the US take advantage of scale to pursue large-scale investment in critical sectors, the EU struggles to follow suit, owing to its decentralized fiscal structures and rules limiting government subsidies to industry. A new EU-level investment program is urgently needed.

MILAN – The European Union, like much of the rest of the world, is facing powerful economic headwinds. But whereas other major economies, such as China and the United States, are well-positioned to use industrial policies to help counter the challenges they face, the EU faces significant structural impediments on this front.