Brussels Economic Monitor 1/2025: From Crisis to Competitiveness - The Imperative for the Clean Industrial Deal
Current facts and figures of the European Union visualized
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1/2025: From Crisis to Competitiveness - The Imperative for the Clean Industrial Deal
The European Commission has unveiled its long-awaited Clean Industrial Deal (CID), a comprehensive strategy that aims to integrate climate action and competitiveness to foster economic growth, accelerate decarbonisation and promote reindustrialisation across Europe. Its main goal is to enhance sustainable and resilient production, focusing on two key sectors: energy-intensive industries and clean-tech sectors.
The initiative couldn’t have come at a more critical moment — while Europe was an early leader in green technologies, it is now risks squandering its opportunity for energy independence as well as losing much of its current industrial base to its heavily subsidised competition abroad.
EU clean tech trade balance
Net exports, in billion Euro
Key topics covered in the Brussels Economic Monitor 1/2025:
- Focus: Clean Industrial Deal
- The EU is wasting its opportunity for energy independence
- Gas prices remain an obstacle for EU competitiveness
- Asia is increasingly competing in the same sectors
- EU EV exports are increasingly headed to the US
- EU private R&D investment prioritizes mid-tech
Take
The Draghi report highlights the widening productivity gap between the EU and the US, revealing a concerning decline in Europe's competitiveness relative to other global economic powers. While US companies are primarily investing in high-growth, high-tech sectors, European member states risk falling into the so-called mid-tech trap. Several countries that were severely affected by the energy price shock following Russia’s aggression against Ukraine are still grappling with an industrial recession.
Now, they face additional pressure from a new China shock, driven by substantial Chinese subsidies for advanced industrial goods, which strikes them at a particularly vulnerable moment. To safeguard Europe’s competitiveness, especially in future technologies, it is essential to develop a cohesive EU industrial strategy. The Clean Industrial Deal offers a solid foundation for this endeavor, but it must now be effectively implemented in a way that best serves the interests of European companies.