Action 1: EU Origin Preferential Scheme


Strengthening the Single Market by Guiding Consumer Behaviour

European Union jobs market financial incentive tax product VAT

In the mid-2020s, the European Union will face a strategic challenge: production and consumption will move outside Europe at an accelerating pace, especially to China and other low-cost countries. Although this is a rational decision for the consumer – buying the cheapest possible – it causes job losses, erosion of the tax base and weakening of the sustainability of the internal market in the EU. The current structures are not sufficient to steer consumer behaviour towards more sustainable choices that are strategically important for Europe. New thinking is needed.

To this end, we propose the creation of an EU Origin preferential system. This would be a common European mechanism for the identification and incentive, the aim of which would be to make consumer products produced in Europe more economically, emotionally and practically more attractive to the consumer – without violating competition rules or WTO obligations.

The system is built on three foundations: verifiability of origin, preferential marking visible to the consumer, and financial incentive. The verifiability of origin would be based on the fact that at least 60 per cent of the value of the product is generated in the EU. This could include manufacturing, design, material processing, or other value-added work. When a product meets the criteria, it receives EU Origin status, the right to use which is supervised by the EU's internal market authority.

The front marking would be a visual and digitally verified identifier that would allow consumers to quickly identify their EU origin. The identifier would work in the same mobile application and receipt data, enabling automatic monitoring of the consumer's purchasing behaviour.

The most critical part of the system would be tax preference or other direct economic benefit. For example, Member States could apply a lower VAT rate to EU Origin products. Another option is to create a refund system in which the consumer receives a rebate for products originating in the EU, which is returned directly in taxation or as support points in connection with public services. In practice, this would mean that a European product would be clearly more competitive for the consumer – not only for emotional reasons, but purely through the wallet.

The introduction of the system would first require legislative preparation and piloting in selected product groups, such as clothing, household appliances or daily consumer goods. At the same time, an open information system would be built that companies could use to apply for EU Origin status for their products and demonstrate that the origin criteria are met.

The impact would not only be economic. The EU Origin system would increase citizens' awareness of their own choices and build a common European consumer identity. This would be an important step in ensuring that the EU no longer functions only as an economic area, but also as a culturally coherent actor that protects its own markets in a sustainable and legal manner.

The EU's competitiveness can no longer be built solely on regulation and reactive protectionism. We need incentives to make Europeanism an attractive choice. The EU Origin preference scheme is just such an instrument – smart, strategic and activating for the consumer. It can concretely shift consumption back home, strengthen the internal market and protect the European way of life without closing ourselves off from the world.

Written by: EU RENEW - Redirecting European consumption - Ways to strengthen economic self-sufficiency
Location: Berliini, Saksa

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