POLITICO — 2026-09-21
Automotive Industry
Center-right EU lawmakers have divided along national lines on what “Made in Europe” should mean ahead of a key debate on the Industrial Accelerator Act next week.
The European People’s Party is trying to shape the bloc’s flagship industrial policy proposal despite having no representative among the lead lawmakers drafting the European Parliament’s position. As the biggest political group in the chamber, however, its votes could prove decisive.
The EPP holds roughly a quarter of the Parliament’s 720 seats, with the largest delegations hailing from Germany, Spain and Poland.
The key rift among EPP delegates is over who gets to join the so-called Made in Europe club — the biggest novelty of the IAA, which would ringfence access to public procurement and subsidies for EU members and certain third countries.
EPP lawmakers are torn between a restrictive “opt-in” mechanism favored by Spanish MEPs, under which third countries would have to qualify for access, and a broader “opt-out” approach backed by the German delegation, whereby partners would be included unless explicitly barred.
Spain’s EPP delegates favor the former approach, according to a preparatory note for a meeting of EPP representatives that took place in Strasbourg last Thursday to define the group’s line. The note was obtained by POLITICO.
“The starting point should be the EU-27, with the advantages linked to Union origin reserved, as a rule, for goods produced in the Union,” writes the Spanish delegation.
The European Commission’s proposal, conversely, would start with a broad list, including virtually any partner that has a free-trade or procurement agreement with the EU. The Commission would then have the power to exclude countries via an “opt-out” mechanism.
German EPP lawmakers are championing a “Made with Europe” option that goes a step further than the Commission by explicitly putting the EU’s 27 member states on an equal footing with closely integrated economies — Norway, Iceland, Liechtenstein and Switzerland — as well as with the United Kingdom.
“Beyond that core, customs union, free trade agreement and GPA partners with corresponding obligations remain in principle included,” German EPP lawmakers write. GPA partners are countries covered by the World Trade Organization’s Government Procurement Agreement.
Last week’s meeting reflected those divisions, four people familiar with the matter told POLITICO. Two identified the “opt-in” versus “opt-out” question as the thorniest issue. They were granted anonymity to speak on the sensitive matter.
National interests collide
The EPP split reflects divergent national economic interests and varying relationships with third countries.
This summer’s migrant crisis in its Ceuta exclave has brought Spain’s economic ties with Morocco under renewed scrutiny. The North African country is top of mind for Spanish EPP lawmakers, who repeatedly cite the example of Ceuta in their preparatory statements to buttress their arguments for a strict approach.
“This distinction is particularly important for Spain and its automotive value chain,” they write, adding that “integrated supply chains with countries such as Turkey or Morocco are an economic reality and must be managed pragmatically.”
Several automakers and suppliers have manufacturing facilities in Morocco or Turkey, including French brand Renault. But Chinese manufacturers are also eyeing the two countries, raising concerns that local production could allow them to qualify for Made in Europe benefits if those countries were included in the club.
Germany, meanwhile, is wary that restrictions on trade flows could disrupt its industrial supply chains and provoke retaliation from Beijing. Its automakers are deeply entrenched in China but are quickly losing market share there as overall sales decline and driver preferences shift to domestic EV brands.
Timeline trouble
The EPP’s three shadow rapporteurs on the file will each get the opportunity to speak next Monday in a debate hosted by the panels scrutinizing the IAA — the committees on Industry, Research and Energy, International Trade, and Internal Market and Consumer Protection.
Lawmakers from each political group are expected to outline amendments to the current draft report, with a deadline for submitting them falling a few days later. The EPP has asked to push back the initial Sept. 30 deadline by at least a day, a person familiar with the matter told POLITICO.
A committee vote on a final report is penciled in for the start of December, ahead of a plenary vote before the Christmas break. To speed up the process, lawmakers can also agree to bypass the plenary vote and give the file leaders a mandate to start inter-institutional negotiations immediately.
With lawmakers split along both party and national lines, agreeing a negotiating position in the Parliament could prove a tall order — and that’s even before talks have begun with the Council of the EU, representing member countries, which has taken a different approach focused on whether products are covered by free-trade or procurement agreements rather than a binary “Made in Europe” test.
All of that puts the Commission’s aspirational year-end deadline for passing the IAA in doubt.
“We’ll try to get the job done quickly, but we’ll make sure to do it right,” Christophe Grudler, the French liberal leading work on the file for the Committee on Industry, Research and Energy, told POLITICO recently.