ABSTRACT
The European Community formulates its industrial policy at different levels. Strong industrial policies are practiced in Western European countries by the respective national governments. Since World War II, the European governments had viewed the automobile industry as an instrument to improve the balance of payments, to develop backward regions, and to stabilize the economy. Industrial policy has been the subject of much debate at the Community level, but of little practice; only isolated elements of it exist. In part, US firms conquered market shares through predatory pricing policies in Europe's mostly unprotected markets. In 1980, the European Commission passed some measures that in due course should limit national aid to problem sectors. An overview of industrial policy at the Community level forces the conclusion that, with the exception of steel, Community policy is extremely fragile and exists only in rudimentary form.
