Artus – The euro zone facing the risk of industrial relocations

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CHRONIC. The outlook is bleak for European industry. Five elements might push companies to relocate to other countries.

By Patrick Artus*

Factories in Salaise-sur-Sanne in Isère on November 7, 2022.
© ROMAIN DOUCELIN / Hans Lucas / Hans Lucas via AFP

Published on 03/04/2023 at 09:00

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Mven if industry in the euro zone seems to be holding up better than expected, since industrial production has increased by 2% over the last 12 months, it is legitimate to worry regarding the outlook for European industry and the risks of relocation to other countries for multiple reasons.

We see five origins for this risk of relocation of European industry: the higher price of energy in Europe than in the United States, the speed of the energy transition in Europe, the perverse effects of the taxation of CO₂ at the borders of the European Union, weak growth for structural reasons in the euro zone and public subsidies in the United States under the Inflation Reduction Act…

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