races and policy divergences that undermine the Single Market on which the EU was founded. This would also put the EU in a stronger global posi­tion, as it could operate more strongly as a bloc to enhance bargaining power on the global stage. Coordination between sectors Challenges to competitiveness cut across entire value chains, not just single industries. By focus­ing solely on single industries in a siloed manner, blind spots could emerge around possible trade­offs between sectors, or around synergies that could mutually strengthen them. Competitiveness depends on the interconnections within the sys­tem, and these interconnections need to be seen, understood and maximised as much as possible. For example, decarbonising the automotive sector requires coordination with the energy production and storage, raw material and digital sectors. By working in coordination through these sectors that make up the automotive supply and value chains, sectors can ensure they have the supplies and skills they need to enhance efficiency. The CCT should encourage a whole-of-supply­chain approach. This approach would help iden­tify bottlenecks and dependencies along the sup­ply chains, allowing for better mitigation of these bottlenecks. Connected to the point above regard­ing cross-Member State coordination, this would also help to identify which regions can contribute which skills, supplies and other strengths to sup­port cross-border supply chains. This approach can also support cross-sectoral innovation eco­systems by linking complementary capabilities across industries and facilitating knowledge transfer. Finally, this approach will strengthen the EU’s resilience, and thus also its competi­tiveness, by linking upstream, midstream and downstream sectors in EU policy ­design. Taking the example of the automotive industry, this could look like coordinating battery production, electric vehicle assembly and charging infra­structure deployment across Member States to ensure a seamless and robust value chain. Considering all of the above, the CCT must func­tion as a bridge across goals, countries and sec­tors. As Mario Draghi emphasised in his report on the future of European competitiveness, this requires prioritising strategic sectors that merit targeted policy support. 22 Hafele et al.(2024) 23 and Humphreys et al.(2025) 24 have illustrated practical approaches for identifying and selecting such sectors. The next chapter outlines some im­portant governance tools and processes to en­sure the CCT can enable such an approach and reconcile the different and potentially competing objectives and interests of policy goals, coun­tries and their regions, and sectors. 22  Draghi, M.(2024). The future of European competitiveness: A competitiveness strategy for Europe. https://commission.europa.eu/topics/eu-­competitiveness/draghi-report_en. 23  Bertram, L., Hafele, J., Kiecker, S.,& Korinek, L.(2024). A unified industrial strategy for the EU: Industrial policy recommendation to promote decarbonisation, competitiveness and cohesion in Europe(p. 27). The Foundation for European Progressive Studies. https://feps-europe.eu/wp-­content/uploads/2024/12/A-unified-industrial-strategy-for-the-EU.pdf. 24  Humphreys, C., Schneider, E.,& Henry, C.(2025). The Competitiveness Coordination Tool: How to make better choices in clean industrial poli­cy . Institute for Climate Economics. https://www.i4ce.org/en/publication/competitiveness-coordination-tool-how-make-better-choices-clean-in­dustrial-policy-climate/. What to coordinate 9