The €29 Billion EU Competitiveness Fund That Is Quietly Reshaping European Industry

The EU's STEP programme has mobilised €29 billion for European competitiveness in two years. Here is what it is funding, which sectors are benefiting, and whether it is working.

The Strategic Technologies for Europe Platform — STEP — was designed to address a specific competitive deficit: European industry's relative underinvestment in the technologies that are expected to drive the next decade of global economic growth. Semiconductors, deep tech, biotech, clean tech, and advanced manufacturing capabilities where Europe had fallen behind the United States and China despite possessing the research base that should have produced global leadership.

Two years into its operation, STEP has mobilised €29 billion across European industry — a figure that combines direct EU grants, EU-backed loan facilities, and the private investment that EU co-financing has catalysed in specific project contexts. The Mayer Brown briefing confirming this milestone in March 2026 notes the two-year achievement but provides limited granularity on the breakdown between direct grant funding and leveraged private investment.

The areas receiving the most STEP investment reflect the platform's stated priorities. Semiconductor manufacturing — the bedrock of the EU Chips Act ambition to expand European chip production capacity — has received the largest single allocation, with the Intel Magdeburg facility and the TSMC Dresden facility serving as the headline investments whose capital costs the STEP framework is partially underwriting. Clean technology manufacturing, with specific focus on battery gigafactory development and electrolyser production for green hydrogen, has received the second-largest allocation.

The 'mobilised' characterisation of the €29 billion is important to understand correctly. A significant portion of this figure represents private investment that STEP co-financing has made more attractive relative to alternative deployments of capital — a leverage effect that EU investment programmes have historically used to amplify the impact of public funds. The direct EU expenditure is a fraction of the €29 billion headline; the remainder is private investment that has been attracted by the combination of EU co-financing, the demand certainty created by EU policy commitments in specific technology areas, and the risk reduction that EU guarantee mechanisms provide to private investors.

Whether the programme is 'working' depends on the definition. If success means capital investment happening, the €29 billion mobilisation represents genuine activity. If success means Europe achieving competitive leadership in the targeted technology sectors, the timescales required for semiconductor or battery manufacturing to reach genuine scale mean the assessment cannot yet be made.