Made by elites, paid by the public: inside Europe’s de-risking industrial strategy

When Mika Seitovirta took on the leadership of Keliber Oy in late 2021, the timing was perfect to make the company’s activities an instant hit. Running the lithium mines in Syväjärvi and Rapasaari, in the Finnish Kaustinen region, connected to a refinery in the Kokkola industrial Park, Keliber Oy is in control of the first integrated project of lithium mining and processing in Europe. Precisely because of the contribution it makes to the supply chain of a crucial material for the production of electric vehicles batteries, the Commission rewarded it with the “strategic” status under the Critical Raw Materials Act - meaning that Keliber Oy can carry out its operations with easier access to public money and without worrying too much about the social and environmental implications of its activities. After all, if it gets the job done, who’s complaining?

Mr Seitovirta was amongst the 890 signatories of the ten-points plan to push for a “business case for investments in Europe” - the well-known Antwerp Declaration for a European Industrial Deal. The economic strategy they proposed is well known to those who follow the European debate on a daily basis and easy to imagine for those who are engaging with this discussion for the first time today. Fearing to be crushed by the world’s industrial heavyweights, the corporate-made recipe for European competitiveness made demands to the European Commission, including deregulation, “competitive and sustainable tax level across Europe” - read, the lowest possible corporate taxes, less stringent reporting of the consequences of their businesses on people and on the environment, and (of course!) increased public support in the form of grants and guarantees to make private investments more profitable. At summits such as the one held in Antwerp, public authorities are turning a blind eye to the fact that the same companies that invoke lack of competitiveness and claim they need public assistance have massively increased  shareholders' profits, but have been unwilling to invest to innovate and decarbonise. The existing loopholes of business models and corporations' responsibility in  fostering (or hampering) the decarbonisation of our economy are not on the agenda. Nor do the promises of “quality jobs for European workers” need to be translated into clear and binding social conditionalities.

The signatories of the Antwerp Declaration knew what they were doing, as Brussels was present and taking notes. Yet, the second Von der Leyen Commission took office, reality exceeded expectations. Faced with a gloomy global economic race for supremacy, the Commission was frantic to find ways to revive European growth rates without openly revealing that it would mean ditching the environmental narrative that had tinged previous legislation with a green hue. Just like doctors signing off on treatment plans written by hypochondriac patients, Ursula von der Leyen presented the new industrial policy at the second industrial summit in Antwerp, in February 2025: “The Clean Industrial Deal, if you look at it, delivers on each and every one of the ten recommendations in the Antwerp Declaration. Your central demand was to make a clear business case for Europe. And I am willing to do that.” So, here we are. In a context when austerity logic is so selectively adopted to justify cuts in social services and climate action whilst increasing defence spending, public money is being massively channeled through grants, guarantees are safeguarding the profitability of private investments with very few strings attached and ad-hoc rules have been introduced to streamline access to state aid resources. These measures are expected to raise up to €100bn between 2025 and 2027 which will be channeled to the manufacturing of supposedly clean technologies, energy- and capital-intensive digital infrastructures and rebranding militarisation as the final frontier of sustainability.

The European Investment Bank plays a key role in the Commission’s plan to derisk European industry’s profits and as shareholders of the Bank, the Member States have recently enabled the Bank to help out more by increasing its lending capacity. The EIB has indeed an enormous investment potential, and the new President of the EIB Group, Nadia Calvino, does not want to miss the chance for the Group to be credited with supporting the new industrial policy. While the EIB still claims to be the EU's Climate Bank, it has reinforced its strategy to focus on technological innovation instead of supporting needed socioeconomic changes to transform our economy through a just transition approach, including adapting business models to halt environmental destruction and provide for people's daily needs. The TechEU initiative, “the biggest-ever financing programme for innovation in Europe”, enshrines this derisking high tech profits commitment by aiming to mobilise up to €250billions in the cleantech manufacturing, digital technologies and defence sectors. In the latest chapter in this saga, a Memorandum of Understanding signed in early December sets forth new co-financing opportunities between the Commission’s InvestAI initiative and TechEU to pool resources into five AI large-scale gigafactories, which will be installed in the Union’s territory. While claims of “digital sovereignty” are used to justify such big digital infrastructure projects, the rolling deregulation flings open doors to US big-tech companies, and the amounts of EU resources used are dwarfed by the investment capacity of private giants such as Microsoft and Google.

Concerns should arise when a publicly-owned financial institution, the European public bank, with European governments as shareholders, pursues short-sighted lending choices which prioritise corporates’ profit-making over long-term economic viability and broader environmental and social objectives. With de-risking mechanisms gaining ground on the European economic agenda and set to be systematised within the post-2028 EU budget, the key concern of the financial crisis of 2008, the “privatisation of benefits and socialisation of losses” once again needs to be a central question into the public debate. Questions on the desirability of de-risking and its effectiveness in bringing about wider public benefits need to be posed on the InvestEU Fund now. This complex de-risking programme mandates private and public financial actors, including the European Investment Bank Group, to increase investments in priority sectors through the use of guarantees. Oversight over the implementation of the program is nevertheless out of political control. The European Parliament itself only has a non-voting power in the Steering Board and has no role to play in the program's governance. Despite having demanded greater oversight, the Commission’s deregulation’s package also watered-down and lessened InvestEU’s reporting obligations, putting transparency in the back seat.

So who’s defining where this money goes? Can a transition pursued through de-risking schemes be a fair one which benefits people, specifically the most vulnerable ones? In theory, the investments under InvestEU Fund should pursue “additionality”, but the concept is so vaguely defined,  that companies that have ample access to capital markets and prefer to use their profits to line their shareholders’ pockets are also eligible to receive public support. Although InvestEU includes a just transition scheme which should help the program target the most vulnerable areas to foster socioeconomic cohesion of the Union, the design and selection of projects is led by the market’s profitability considerations and there are no strings attached for companies or private investors receiving support to change their business models and support productive investment, decarbonisation or job creation. InvestEU-backed loans were provided to two battery gigafactories operating in France, one in Dunkirk run by Verkor and the other in the “battery valley” in the country’s northern area, run by the Automotive Energy Supply Corporation. It does not count if those same manufacturing plants can easily access alternative sources of finance through commercial banks. Nor does it matter when some of those same big infrastructure plans are so economically unviable that they have gone bankrupt after EIB’s support with almost a billion, under the blessing of the InvestEU’s governing bodies. At the end of the day, the companies present in Antwerp haven’t shown interest in decarbonising for example European mobility so as to increase public and shared mobility, combined with cutting individual consumption patterns. In those venues, the transition of the individual transport sector can only take place by replacing old, polluting cars with shiny and expensive new electric vehicles. Manufacturing more and more batteries thus becomes a priority, and the EIB can use the InvestEU guarantee to stimulate their manufacturing and supply chain. Grassroots projects pursuing a different transition away from fossil fuels need to rely on private citizens’ solidarity to be implemented, as it is the case for workers running the ex GKN manufactory site in Florence who used to make car parts and now plan to manufacture cargo bikes, whilst the €150 million InvestEU-backed loan the EIB provided to Mr Seitovirta’s Koliber Oy is justified for its contribution to the transition of the car sector. Just as its predecessor, the European Fund for Strategic Investments, the additionality of the InvestEU guarantee seems hard to define at the moment. What is more transparent now is that public money is often used in line with what the elite agrees on in those shiny venues, prioritising top-down big industrial projects driven by delusions of grandeur over ensuring households’ liveability.

The latest official figures of the InvestEU guarantee prove the limits of this de-risking program to bring about broader public benefits. Social services such as housing and education are also amongst its targets. But between 2022 and mid-2025, social investments encompassing projects targeting the inclusion of vulnerable people, the provision of health care, educational infrastructures and social housing projects, only received 6,4% of total investments. These sectors are generally dominated by public entities, it is private sector actors that massively require public guarantees to increase the profitability of their investments. With profitability as the rationale driving its implementation, InvestEU is inadequate to target social and environmental investments in public services as its preference to cater to  the elite’s wishes doesn’t fit with providing public support to projects that have long term economic viability, but are not profitable enough for shareholders in the short term. In a context of the affordable housing crisis and mounting socioeconomic inequalities, public banks including the European Investment Bank and European Investment Fund need to make sure to support people’s basic needs through the most adequate means. Isolated examples within the derisking framework are not enough to address the scale of the problem. A student housing facility receiving the European Investment Fund’s support was in fact recently inaugurated in Naples (Italy) under the InvestEU guarantee. But public investments should target the provision of green and affordable housing and transport solutions, as the Bank recently acknowledged. It is now even more necessary for the delayed establishment of the Social Climate Fund, and the ETS2 Frontloading Facility might be a good step to tackle some of the most urgent social needs of our time. But if we are bold enough to look beyond the narrow elite vision of the Antwerp declaration, we can see that public banks and investment funds have vast resources, more than 70 percent of the EU economy and 40 percent of the European banking sector. Programs like InvestEU should use public support to enable these actors to promote a structural overhaul of the European economy. Such a transformation should promote a change in industry’s business models to ensure it makes productive investments to decarbonise, provide quality jobs and contribute to expanding people’s access to daily needs like affordable and sustainable energy, housing, mobility, health care and education.