France and Germany are at odds over plans to tie public support for strategic industries to European production, opening a dispute over whether the European Union’s proposed “Made in Europe” rules should apply only within the bloc or extend to selected trading partners.
The European Commission presented its proposal in March as part of an effort to strengthen domestic manufacturing and reduce external dependencies. The plans would require companies in sectors including autos and clean energy to buy European in order to receive public money.
The proposed rules cover heat pumps, photovoltaic systems and important building materials such as cement and aluminum. Their final design could determine whether subsidies and public contracts in these sectors are restricted to the EU’s 27 member states or are available to manufacturers in allied countries.
France is pressing for the narrower approach. Sébastien Martin, the French industry minister, said before a Thursday meeting with EU counterparts in Brussels that “Europeans' public money should support European workers and European factories.”
Martin has said that “Made in Europe” means the 27 EU member states. He has also argued that production must take place in Europe for companies to claim public subsidies.
Germany has backed a broader principle it calls “Made with Europe”. Katherina Reiche, the German industry minister, spoke in Brussels in favour of including trading partners in the scheme.
Under Germany’s approach, production would remain in Europe while supply chains could include partners such as Norway, Switzerland and countries including Canada. Berlin’s position reflects its preference for maintaining flexibility through established trade relationships.
An unofficial German working paper proposes equal treatment for countries covered by certain agreements or a customs union, provided they meet specified criteria. It also suggests the rules could later be extended to third countries, or that states could again receive exemptions.
Brussels has also favoured looser provisions that could cover products made in some partner nations. Those countries could potentially include dozens of nations linked to the EU through free trade agreements, customs unions or public procurement deals.
The disagreement sets two approaches to EU industrial policy against each other. France wants public funds directed to factories and workers inside the bloc. Germany is seeking a framework that preserves production links with neighbouring countries and other trading partners.
Jürgen Kerner, an IG Metall representative, criticised the German position. He said the federal government wanted to delay and weaken the European regulation and “torpedo effective rules.”
Peter Burke, Ireland’s minister and the holder of the Council presidency, said the talks showed signs of movement. He said agreement could emerge by early December.
“There are already some approaches emerging that we can bring together to formulate a new, revised text,” Burke said. The final definition of “Made in Europe”, the countries that may qualify under any wider arrangement and the timing of a final EU decision remain unresolved.
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