France wants the European Union to adopt a "Made in Europe" strategy in response to the U.S. green investment subsidy scheme to keep industrial firms from leaving Europe and reduce members' dependence on outside suppliers.

EU leaders are expected to discuss this industrial policy at a Feb. 9-10 summit in Brussels, fearing that the $369 billion American Inflation Reduction Act, which subsidizes goods from batteries to electric cars, solar panels and wind turbines, will drive companies out of the EU

“The implementation of an ambitious and robust European industrial policy is therefore essential today. The French authorities propose that it take the form of a ‘Made in Europe’ strategy,” France said in a paper seen by Reuters.

EU leaders agreed last March that Europe must reduce its dependence on outside suppliers of energy, critical raw materials, semiconductors, medicines and food.

The French document calls for urgent action, particularly to retain European companies involved in the production of solar cells, batteries, hydrogen and critical raw materials, noting that the Made in Europe strategy should be based on four pillars.

The first would be the EU's goals of reducing dependence on outside suppliers and setting manufacturing targets by 2030 in key sectors that would be regulated by EU laws, like the block made for semiconductors with the Microchip Act.

The EU will also have to simplify and speed up approvals for the installation of new manufacturing sites and overhaul its energy market to ensure European businesses have access to affordable energy, the document said.

The second would be an urgent change in EU rules regarding the aid that governments can give to companies so that emergency state aid for companies, already authorized in the COVID-19 pandemic, can continue for targeted sectors on a temporary basis.

Government aid could be in the form of subsidies or tax credits, the paper said, to provide clarity for businesses when they make investment decisions now.

A third pillar should be EU funding for sensitive sectors, which would help equalize uneven fiscal power to support industries between EU countries. This could take the form of a fund that uses joint and therefore cheap EU loans, which would then be passed on to individual countries in the form of cheap credit.

Paris has also proposed the creation of an "emergency fund" that would redirect the money the EU has already agreed to collect to other purposes, to help the EU invest in strategic projects for European industry, in addition to national state aid.

Finally, by the end of 2023, the EU should create a new "sovereignty fund," which would take over the function of an emergency fund to work in sensitive sectors.

The last pillar of the strategy will be a fully mobilized trade policy, including the latest trade protection instruments, the document says.

Such measures, if announced by EU leaders at the Feb. 9-10 summit, would convince business of the EU's determination to strengthen economic attractiveness and prevent firms from leaving Europe, which is now a real risk.