This paper discusses the notion of an entrepreneurial state and questions the European Union’s (EUs) increasingly interventionist industrial policies. The EU’s green deal is a massive effort to steer the economy in new directions. Unfortunately, green deals have often resulted in green bubbles, i.e. overinvestments that fail to generate any sustainable businesses or industrial transformation in the long term. This paper presents a couple of illustrative examples of failed green deals and synthesises some of the main findings. A couple of factors jointly explain the persistent failure of green deals, including (1) if something sounds too good to be true, it is too good to be true; (2) governments lack incentives and capabilities to act as entrepreneurs; and (3) allocation of large sums of ‘free’ money to innovation and entrepreneurship distort behaviour. Green transitions become more successful when policymakers impose laws and regulations to deal with negative externalities.
Sandström, C. (2023). From green deals to green bubbles: time to question Brussels as an entrepreneurial state. Future Europe Journal, 8.