The focus of this thesis are the industrial policy of the European Union. The legal regulations governing industrial policies will be discussed in detail. While defining industrial policy and elaborating on its forms, basic principles and instruments, the thesis will describe the ways in which all member states contribute to the industrial policies of the European Union and implement them in their own national legislation. Furthermore, historical development of politics as such will be analyzed, from its progressive beginnings to the creation of today’s industrial policies. The relation between industrial policy and other policies of the European Union will be described, from industrial policy’s correlation with the internal market, consumer rights protection, public healthcare, social and employment policies, and environmental policy, to its correlation with the economic monetary union, taxation, and competition policy. Furthermore, the thesis will elaborate on the EU’s industrial policy under the Lisbon strategy, and the recent “Europe 2020” strategy, paying particular attention to its cohesion policy with the Republic of Croatia. The connection of industrial policy and the Republic of Croatia will be covered in detail, starting with an elaboration on Croatia’s industrial strategy in general, and further examining the positive influence of the EU’s industrial policy through the aspects of small- and medium-sized entrepreneurship, research and technological development policy, innovation policy and energy policy. The purpose of this paper is to show the relevance of industrial policy of the European Union in comparison to the EU’s other policies, its influence on the economy and industry of Europe, as well as its developmental impact on the industry in Croatia.