What kind of idiot would manufacture something in the European Union that declared: “You want to manufacture in the EU – give us your technology for free”?

 

The situation mentioned here is related to the Industrial Accelerator Act, presented by the European Commission on 4 March 2026, which sets strict conditions for foreign investors in strategic sectors.

 

Here are the key facts about these new rules:

 

Mandatory technology transfer: Large investments (over €100 million) from countries that control more than 40% of global production capacity in a given area (e.g. China in solar energy or battery production) will have to generate value in the EU through mandatory technology and know-how transfer.

 

Ownership restrictions: In strategic sectors such as electric cars or critical raw materials, foreign entities will not be able to have a controlling stake – their ownership will be limited to 49%.

 

‘Buy European’ requirements: Local content requirements are set to receive state support or participate in public procurement. For example, in electric cars, at least 70% of the value of components (excluding battery cells) will have to be produced in the EU.

 

Jobs: Investors will have to ensure that at least 50% of employees are EU citizens.

 

Why is the EU doing this?

Brussels is seeking to protect its industry from dependence on China and increase the share of manufacturing in EU GDP from 14.3% to 20% by 2035. This is a response to similar protectionist measures by the US and China.

What are the risks?

Some EU countries (e.g. Sweden, Czech Republic) warn that such strict rules could deter investment, slow down innovation and raise prices for consumers.

 

“The European Union (EU) on Wednesday unveiled rules for its “Buy European” initiative to boost domestic manufacturing, which Brussels says will help protect European companies from fierce global competition, particularly from China.

 

“What I am presenting to you today is more than just a change in operating procedures. It is a change in doctrine that was unthinkable just a few months ago,” said Stephane Sejourne, the EC’s executive vice-president for prosperity and industrial strategy.

 

The European Commission said the package aims to increase the share of manufacturing in EU GDP to 20% by 2035, up from around 14% in 2024.

 

Brussels estimates that around 600,000 jobs are at risk over the next decade if the EU’s industrial decline continues at the current pace.

 

Increasing the EU’s competitiveness has become particularly urgent in the wake of the COVID-19 pandemic and the war in Ukraine, when soaring energy prices exposed the Community’s vulnerability to supply shocks.

 

The “Made in Europe” measures planned last year have been postponed several times due to disagreements over their scope within the European Commission and among member states.

 

The Commission has proposed that companies wishing to receive public funds will have to meet minimum requirements for EU-made parts in “strategic sectors” that will include cars, green technologies and “energy-intensive” industries such as aluminium and steel.

 

For example, electric car manufacturers will have to ensure that at least 70% of their car components are produced in the EU in order to receive public funds, according to a draft document that is still subject to change.

 

The proposal will have to be approved by EU member states and the European Parliament.

 

Its supporters argue that if the EU does not protect its strategic sectors, it will have no industry to defend. But sceptics, including the EU's biggest economy, Germany, say Europe can support domestic industry by introducing a "Made in Europe" principle that would involve the bloc's trading partners.

 

The future rules are unpopular outside the EU, with countries such as Britain, Canada, Japan and Turkey fearing they will be too restrictive.

Foreign investment screening

 

According to the draft document, the proposal, known as the "Industrial Accelerator Act", aims to ensure that foreign companies looking to set up in the EU and gain better access to its market work with European companies.

 

To achieve this, foreign investments exceeding €100 million in "emerging strategic sectors" such as batteries and electric vehicles are subject to certain conditions. They apply when the investor is from a country that has more than 40% of the relevant global production capacity - an implicit reference to China's dominance in these sectors.

 

In order for such projects to be implemented, foreign investors must meet certain conditions, including the requirement to employ at least 50% of EU workers, to hold no more than 49% of the shares of the EU company concerned and to transfer technological know-how.

 

“If access to the EU market is one of the most valuable industrial assets in the world, it is legitimate to set conditions that strengthen European capabilities,” said the Paris-based Institut Montaigne spokesman Joseph Dellatte, rejecting criticism that the plans are “protectionism”.

 

The measures are among many the EU is considering to implement in a bid to regain its competitive edge.

 

Also read: ‘Buy European’ plan: Europe divided in two seeks balance between protection and competition

 

The EU will also propose this month a pan-European legal framework for innovative start-ups, which it says will make it easier to do business by reducing the time it takes to set up a company in the 27 countries.

 

Many see the plans as necessary to boost the EU’s green technology development.

 

The aim is to ensure that EU taxpayers’ money is “used strategically to strengthen Europe’s industrial base, not to subsidise China’s overcapacity”, said Neil Makaroff, a climate research centre.

 

But some experts say that if the EU wants to combat what it sees as unfair competition, Brussels has other tools.”