EU Strives for “Strategic Autonomy;” France Offers Grants for Electronics Manufacturing Projects

Key Summary

• EU leaders prioritize “strategic autonomy” to reduce reliance on foreign suppliers revealed during COVID-19
• Recovery and Resilience Facility dedicates major funding to digital transition, including 5G, AI and microelectronics
• EU urges Member States to align national recovery plans with goals for resilience, climate action and digital investment
• France launches €100B Recovery Plan with grants for reshoring and strengthening electronics manufacturing
• Eligible French projects include new production units, upgrades for flexibility, industrial-scale technology deployment and PCB manufacturing

When European Commission President Ursula von der Leyen unveiled her €750 billion Recovery and Resilience Facility (RRF) to help the European Union recover from the COVID-19 pandemic, she stressed that “strategic autonomy” must be at the heart of the EU’s response. As was also seen in North America, the COVID-19 crisis revealed the EU’s dependence on other regions for critical goods, including raw materials, medicines, and medical supplies.

More recently, during the European Council meeting on 1-2 October, national leaders concluded that “achieving strategic autonomy while preserving an open economy” was a key objective of the Union. They called on the European Commission to identify and address various strategic dependencies by diversifying production and supply chains, “especially for microprocessors,” as well as by fostering production and investment in Europe. About the same time, European Council President Charles Michel stressed that the notion of strategic autonomy should not equate to protectionism, but rather it should translate into the dissemination of European standards and values around the world.  

EU leaders have also agreed to focus on the development of next generation digital technologies, including accelerating the deployment of 5G, supercomputers, blockchain, and human-centered artificial intelligence. To help achieve these objectives, EU leaders reiterated that at least 20 percent of the funds under the RRF should be made available for the digital transition, including funds for small and medium-sized enterprises.

To encourage national capitals to draw up recovery plans in line with the overarching goal of more autonomy, the Commission has proposed certain guidelines for Member States. For example, to foster resilience and autonomy at the national level, the guidelines recommend a minimum of 37 percent of expenditures related to climate objectives and 20 percent related to the digital transition.

French Plan Includes Electronics Manufacturing Among Strategic Industries  

In line with the EU’s call for greater autonomy, the government of France’s €100 billion Recovery Plan aims to encourage the reshoring and strengthening of key sectors including electronics manufacturing. A call for specific investment proposals was issued on August 31 and is open through November 17. Projects aimed at strengthening the capacity of electronic manufacturing companies to respond to crisis situations will be given priority. Annex 3 of the document provides a non-exhaustive list of activities that may qualify, such as:

• The creation of new production units;
• Investments in existing production units to make them more productive and flexible;
• The development and implementation of new technologies on an industrial scale; and
• Manufacturing of printed circuit boards, as well as assembly services.

The French plan includes a total of 13 criteria that businesses must meet to qualify for financial support.

How would these proposals and plans affect your company? We would love to hear from you on this and any other EU policy issues of concern. Please reach out to me at AlisonJames@ipc.org with any questions, issues or comments.