Industrial policy, competition policy and strategic autonomy

There is a growing recognition in the European Union (EU) of the need to become more "strategically autonomous" in the current global economic environment. The idea is that this can be achieved by diversifying supply chains and making sure there are critical capacities domestically or at least within the EU. However, such a strategy creates a formidable challenge for the integrity of the internal market and could spill over into the various branches of competition policy. This chapter aims to provide insight into the balancing act that state and market actors must perform when potential conflicts between industrial policy and competition law and policy arise. It argues in favour of a more harmonious market failure test.