Europe is attempting to answer a difficult economic question: how can it rebuild industrial strength while remaining open enough to preserve trade, competition and resilient supply chains?
The disagreement between France and Germany over the proposed “Made in Europe” rules reveals how differently Paris and Berlin approach that challenge.
The European Commission’s proposed Industrial Accelerator Act is designed to channel public procurement and financial support toward strategic industries, including automobiles, steel, batteries, clean technologies and other sectors considered important to Europe’s economic security.
The broader objective is to strengthen European manufacturing and reduce dependence on external suppliers, particularly as Chinese industrial competition becomes increasingly powerful. France is pushing for a relatively strict interpretation.
French Industry Minister Sébastien Martin argued in Brussels that European public money should support European workers and factories. Paris therefore wants stronger European preferences when governments distribute subsidies or award major public contracts.
France has argued that sectors such as automobiles possess sufficiently integrated European supply chains to justify a strong domestic preference. Germany is concerned that an overly restrictive system could undermine Europe’s competitiveness and relationships with important trading partners.
Berlin is promoting the concept of “Made with Europe” rather than simply “Made in Europe.” Under Germany’s proposal, countries outside the European Union could participate where they provide reciprocal access to their own public procurement markets.
Potential partners include Norway, Switzerland and Canada, alongside other countries connected to the EU through trade agreements or international procurement arrangements. The difference is more than a dispute over terminology.
It reflects two competing approaches to economic security. France emphasizes industrial sovereignty. From this perspective, European taxpayers should not finance industrial capacity that ultimately depends heavily on foreign production.
Public money becomes an instrument for strengthening European factories, employment and technological capabilities. The approach is particularly relevant as Europe faces intense competition from Chinese manufacturers across electric vehicles, clean technology and industrial equipment.
Germany places greater emphasis on open supply chains and international partnerships. Its industrial economy is deeply connected to global trade, meaning that excluding trusted partners could increase costs or restrict access to essential components.
Berlin argues that reciprocal access could actually strengthen European resilience by diversifying supply chains rather than concentrating production entirely within the EU. There is also a practical problem.
Europe cannot currently manufacture every strategically important component at sufficient scale. A rigid definition of European production could therefore create shortages or increase procurement costs. Germany has warned that broader participation could help Europe obtain critical inputs while maintaining relationships with strategic partners.
Yet openness creates another risk. Foreign companies could potentially establish production in partner countries mainly to exploit favourable origin rules and bypass European restrictions. Germany itself has acknowledged this possibility and has proposed stronger monitoring, compliance checks and mechanisms for excluding countries or companies that undermine the intended rules.
Spain has attempted to bridge the positions by proposing different categories of countries, ranging from the EU’s 27 members to trusted partners and countries with appropriate trade or procurement agreements.
Ireland, which holds the rotating EU Council presidency, hopes to facilitate a compromise among member states by December. The debate is about how Europe defines economic sovereignty in a globalised economy.
The choice between “Made in Europe” and “Made with Europe” will influence where public money flows, how companies structure supply chains and how the EU balances industrial protection with international cooperation.
As Europe confronts Chinese competition and geopolitical uncertainty, the outcome could become an important test of whether its industrial strategy can combine domestic capacity with global economic partnerships.
Germany Cuts Fuel Tax as Consumer Confidence Plunges to 2008 Financial Crisis Levels
Meanwhile, the German economy is facing a difficult combination of higher energy costs, weakening consumer confidence and renewed pressure on household purchasing power.
On September 25, the German parliament approved a temporary fuel-tax reduction designed to cushion motorists from soaring petrol and diesel prices linked to the war involving Iran and disruptions affecting energy markets. The measure is scheduled to run from October 1 through December 31, 2026.
Under the new measure, Germany’s energy tax on petrol and diesel will fall by 14.04 euro cents per litre. Including the associated reduction in value-added tax, motorists could receive gross relief of roughly 17 cents per litre.
The Bundestag approved the measure by 434 votes to 128, with no abstentions. The intervention comes as energy prices have become an increasingly important economic problem. Fuel costs do not affect motorists alone.
Higher transportation expenses can feed into logistics, agriculture, manufacturing and retail, eventually raising the prices consumers pay for goods and services. For households that depend heavily on cars for commuting or daily activities, the effect can be particularly immediate.
Yet the fuel rebate arrives against a deeper problem: Germans are becoming increasingly reluctant to spend. The latest NIM Consumer Climate survey, powered by GfK, showed that the consumer climate indicator fell 3.8 points in September to -30.6, compared with a revised -26.8 in August.
The deterioration was driven particularly by falling income expectations and greater willingness to save. The savings indicator climbed six points to 21.5, reaching a level comparable to the financial and economic crisis of 2008.
NIM said rising energy prices are contributing to uncertainty and encouraging households to preserve cash rather than increase consumption. The survey was conducted between September 3 and 14 among around 2,000 consumers.
That shift matters because consumer spending remains an important component of Germany’s economic activity. When households become defensive, they postpone purchases, reduce discretionary spending and accumulate savings.
Businesses can then face weaker demand, creating another obstacle for an economy already dealing with sluggish growth and elevated energy costs. The latest figures also reveal how quickly sentiment can change.
In August, consumer confidence had improved, with the consumer climate rising 2.8 points to -26.6. Income expectations had strengthened and willingness to save had eased slightly. By September, however, the renewed energy shock had reversed much of that improvement.
The fuel-tax cut therefore represents a short-term attempt to protect household purchasing power. But it cannot eliminate the underlying exposure of Germany’s economy to international energy markets. The relief is temporary, while geopolitical disruptions, transportation costs and inflationary pressures can persist beyond December.
Germany’s challenge is consequently larger than the price displayed at petrol stations. The government must contend with an economy in which households are increasingly prioritizing financial security over consumption.
The combination of expensive energy and cautious consumers creates a difficult environment for businesses and policymakers. The fuel rebate may provide immediate breathing room for motorists, but the September consumer-confidence figures underline a broader concern.
Germany’s households are not simply paying more at the pump. They are changing how they think about spending, saving and economic security.
