The Politics of European Industrial Strategies between EU Constraints and Regional Foundations: European Governments Across the Green Interventionist Turn and Back

The European political economy has entered a period of profound structural instability. The early 2020s appeared to herald a burgeoning Green Interventionist consensus, characterized by ambitious public investment plans in the green transition and a break from austerity. However, amidst an escalating poly-crisis, this consensus is faltering. As of 2024, EU Fiscal rules have returned, and calls for competitive deregulation, military re-armament, and economic securitization are growing louder. This project addresses a central puzzle: why do national responses to these common external pressures diverge so sharply? Why are some countries betting on green re-industrialization while others double down on "brown" strategies and deregulation? Challenging the economic functionalism often found in Comparative Political Economy (CPE), this research re-centers political agency as the decisive variable. It conceptualizes government strategies as the outcome of a two-level game. At the supranational level, coalitions navigate a shift from the green industrial expansionary phase to an emerging period of re-carbonizing, de-regulative, and militarist counter-reform for European economy and industry. At the domestic level, the paper introduces a novel focus on the politics of regional growth coalitions, positing that national politico-economic projects are fragile compromises designed to satisfy dominant regional constituencies while neutralizing opposition. It hypothesize that the shift between the first and the second phase empowers differently oriented actors, political and economic, at the domestic level and thus drives and constrains different politico-economic projects in industrial policy. These are however mediated by the agency and orientation of governing parties. Empirically, this paper wants to focus in particular over the upper part of the two-level game, the EU-governments interaction, and analyze the trajectory of four EU countries and their different political projects, where variation occurs in terms of partisan and programmatic orientation towards industrial policy, coalitional construction (considering economic, sectorial and regional actors), policy outputs and decisions, and time: meaning that the shifts at the EU level correlates with the domestic ones. These are the progressive green re-industrialization project of the Spanish Sànchez Government. The protectionist nationalist project of the Italian Meloni Government, with industrial policy oriented to fossil security and defense. The German alterance between a (failed) progressive green modernization of its manufacturing industry, and the neoliberal competitive and militarist alternative proposed by the Merz government. Finally, a counter-intuitive and unlikely case of neoliberal Green Backlash, with the Kristersson right-wing government dismantling energy transition and compromising the Swedish green industry. By mapping these dynamics, the paper investigates the political foundations behind Europe's divergent industrial futures.