This paper deals with the research of the European Union's industrial policy. The paper presents the theoretical aspects of industrial policy, different definitions of industrial policy from various authors, tools and instruments, as arguments for and against industrial policy. Then, the development phases of the European Union's industrial policy are described and the European Union industrial policy since the Lisbon Agenda is more elaborated. An overview of the European Union's performance and some of member states is given, and a comparison with Japan and the United States of America. A detailed description of industrial policy within the Europe 2020 strategy is given, as well as priorities, initiatives, communications and current challenges related to industrial modernization. Also, there are programs, instruments and policies that directly and indirectly contribute to the European Union's industrial policy. Furthermore, the modern industrial policy of the Federal Republic of Germany is presented. The aim of research is to synthesize knowledge of the European Union's industrial policy and present current initiatives and industrial policy programs at EU and Federal Republic of Germany level that contribute to economic growth and development. The purpose of the research is to point out the importance and role of the European Union's industrial policy in promoting competitiveness of the industry and the economy of European Union.