Germany’s Chancellor Friedrich Merz has issued one of his strongest appeals yet for what he calls “European patriotism” — a collective effort to defend Europe’s steel industry, which faces growing pressure from Asian imports, rising energy costs, and environmental regulation.
Speaking at a major steel conference in Duisburg, Merz said the continent must “act together, invest together, and protect together” or risk losing one of its most vital industrial foundations. With billions of euros and tens of thousands of jobson the line, the Chancellor’s message signaled a decisive pivot in Germany’s industrial policy toward strategic protectionism and pan-European coordination.
Europe’s Steel Crossroads
Europe’s steel industry — once the backbone of postwar reconstruction and modern manufacturing — is now under existential pressure. High production costs, driven by energy prices and strict carbon rules, have eroded competitiveness against cheaper steel from China, India, and Turkey.
According to Eurofer, the European Steel Association, production across the EU has fallen by nearly 30% in the past decade, and more than 40,000 jobs have been lost since 2015. Germany, home to industrial giants such as Thyssenkruppand Salzgitter, has been hit especially hard.
Merz described the situation bluntly:
“If we continue to import cheap steel made with coal and export clean steel jobs made with innovation, we are failing both our workers and our climate goals.”
‘European Patriotism’ as Industrial Strategy
The Chancellor’s concept of European patriotism is not about nationalism, but economic solidarity — a recognition that no single country can protect its industries alone in a globalized market dominated by state-backed competitors.
Merz urged EU member states to coordinate subsidies, tariffs, and investment incentives, emphasizing that fragmented national approaches only weaken Europe’s bargaining power.
He elaborated:
“The Americans protect their industries with the Inflation Reduction Act. The Chinese support theirs through state planning. Europe must respond with its own form of economic patriotism — rooted in cooperation, not isolation.”
The idea resonates with growing voices in Brussels calling for a “Buy European” industrial policy, one that channels public investment into homegrown manufacturing, renewable infrastructure, and green innovation.
A Green Transition Dilemma
Europe’s ambitious Green Deal has placed steelmakers in a tough spot. Producing green steel — steel made with hydrogen instead of coal — is essential for the EU’s climate goals, but the costs are staggering.
Industry analysts estimate that transitioning to green steel production could require over €150 billion in investments by 2040. Yet the incentives and subsidies remain fragmented, and many plants are operating on thin margins.
Merz, who has previously criticized what he called the “regulatory overreach” of Brussels, acknowledged the need for pragmatic balance between decarbonization and competitiveness:
“We must go green, but we must also survive. Climate neutrality will not mean much if our industries are dead before we get there.”
His government is pushing for joint European funding to support hydrogen-based steel production, alongside carbon border adjustment mechanisms (CBAM) to level the playing field with countries that still rely on cheap, high-emission production.
Billions in Play
At the heart of Merz’s plan is a €10–15 billion national and EU-supported industrial fund to modernize steel plants, secure supply chains, and reduce energy dependency.
Germany’s Economy Ministry is already in talks with Thyssenkrupp, ArcelorMittal Europe, and Salzgitter AG to co-finance next-generation green steel facilities. The initiative is expected to involve public-private partnerships and cross-border EU investments, making it one of the largest industrial cooperation efforts since the founding of the European Coal and Steel Community (ECSC) in 1951 — the precursor to today’s European Union.
Officials in Brussels see this as symbolic:
“Europe began with steel,” one EU commissioner said, “and Europe may have to reinvent itself through steel once again.”
Global Competition Intensifies
The Chancellor’s remarks come amid growing frustration over China’s subsidized steel exports, which have flooded global markets and driven prices down. Despite EU tariffs, imports of Chinese semi-finished steel rose by more than 20% in 2024, putting further strain on European producers.
Meanwhile, the United States has doubled down on its Buy American provisions, offering tax credits and subsidies for domestic steel production under the Inflation Reduction Act (IRA). This leaves European manufacturers squeezed between two industrial superpowers, both shielding their markets while Europe remains largely exposed.
Merz’s call for “European patriotism” aims to reverse this asymmetry — not through isolationism, but through strategic alignment.
“If the world plays by industrial rules, Europe cannot afford to play by academic theories,” he said. “We need action, coordination, and courage.”
The Social Dimension: Protecting Workers and Regions
Beyond the economics, the fight for steel carries deep social and political significance. Steel towns like Duisburg, Essen, and Liège are emblematic of Europe’s industrial identity. Their decline has fueled political disillusionment and populism — a reality not lost on policymakers.
Trade unions have cautiously welcomed Merz’s announcement, urging him to ensure that state aid is tied to job retention and fair wages.
IG Metall, Europe’s largest industrial union, issued a statement saying:
“We will support the green transition, but not at the expense of workers. European solidarity must include social justice.”
For Merz, this presents both an opportunity and a challenge: positioning himself as a pro-worker conservative leaderwhile balancing the demands of fiscal discipline and industrial revival.
Europe’s Next Industrial Test
The Chancellor’s appeal aligns with a broader debate now raging in Brussels: Should Europe embrace a more protectionist industrial policy, or remain open and market-driven even at the cost of losing strategic industries?
The European Commission is currently drafting new guidelines for state aid flexibility, allowing member states to invest more aggressively in critical sectors such as steel, batteries, and semiconductors. Merz’s advocacy could give these reforms political momentum, especially as elections approach and public anxiety over deindustrialization grows.
Experts believe that if implemented, the new policy framework could reshape Europe’s industrial map — with steel at its center once again.
Conclusion: A Defining Moment for European Industry
Chancellor Merz’s call for European patriotism in steel is more than a slogan; it’s a vision of economic self-determination in an era of global turbulence. With billions at stake and climate deadlines looming, Europe faces a pivotal choice: continue on a fragmented path, or forge a united industrial front that protects both jobs and sustainability.
The coming years will test whether this vision can translate into policy — and whether the continent that once built its unity on steel can now save it through solidarity.
As Merz declared in Duisburg:
“Steel built Europe once. It can build Europe’s future — if we have the courage to defend it together.”
