Important Projects of Common European Interest (IPCEIs) as a New Form of Differentiation: An Analysis of Their Challenges for the European Single Market

In support of a more active EU industrial policy, so-called Important Projects of Common European Interest (IPCEIs) have been increasingly used in recent years. IPCEIs can, however, create some tensions with EU competition policy, and thus the functioning of the Single Market. In this paper, we show that these tensions are linked mainly to the nature of IPCEIs, constituting budgetary differentiation with a comparatively informal and vague governance framework. The identified key challenges for the Single Market’s level playing field are differences in financial, technical and administrative capabilities between member states and their enterprises as well as shortcomings in the arrangements governing the creation, implementation and evaluation of IPCEIs. Based on analyses of the public consultation for the recent revision of the Commission’s IPCEI communication and all currently approved national recovery and resilience plans, we find that the identified challenges have not been addressed sufficiently so far. To alleviate some of the tensions between EU industrial policy and competition policy we recommend to finance IPCEIs through European rather than national funding and to implement a more inclusive and coherent governance framework.