Here is my ‘net take’ from the European Ideas Network (EIN) conference, where I was on a panel discussing industrial competitiveness. This fits well with current concerns about growth and job losses, as policy-makers try to think beyond the financial crisis and toward the next EU mandates, 2014 – 2019.
( This post includes links to EIN-produced video summaries. It is complemented by EurActiv’s Special Report on industrial policy in English (et en français ici). Transparency: that Special Report was supported by the Paris-based Cercle de l’Industrie, not present in Berlin, and was written independently by EurActiv journalists)
The EPP group met in Berlin on 4 and 5 October with think tanks and companies, for its . Speakers asked for more coherence in policy decisions, but not addressing the Commission’s industrial policy in discussion, and approved the following week.
EPP group president Joseph Daul and EPP President Wilfried Martens introduced the topic ‘Growth and stability for Europe and the Euro”. In a historic location next to the former Berlin Wall, they called the largest political group to take its responsibilities, as supporters of both Commissions Barroso I and Barroso II, before and during the current crisis.
This set the stage for strong keynotes from two German leaders: finance minister Wolfgang Schäuble, and ThyssenKrupp CEO Heinrich Hiesinger, on two prerequisites for global competitiveness.
Issues: all related to competitiveness
Schäuble told his party friends: “We […] need to make Europe more adapt to respond to these [global] challenges and build the right framework within which all Europeans have a prosperous future”. And more specifically: “Stable finances are the precondition for trust and thus for economic growth. […] Reducing national debt creates the necessary condition for creating economic growth.”
The steel boss Hiesinger correlated competitiveness and the proportion of industrial products in the economy, leading to only 9 out of the world’s top 100 companies being from the EU. He then challenged Europe’s high CO2 tax, despite the continent’s low and diminishing share of global emissions (from 20% in 2000 to 12% in 2010). For him, “Under the 2013 goals from Brussels, even the best [least emitting] steel plants will have to buy Emission Trading Certificates”. He claimed that this would cost more than the profit those plants could make, hindering producers’ ability to invest.
While the conference also handled foreign policy, geopolitics and enlargement, it focused mainly on tackling the economic crisis. Titles of roundtables speak for themselves: ‘How to stop deindustrialisation in the EU’, ‘Channelling finance and innovation to industry’, ‘New ways of employment in the post-crisis society’, ‘Is green growth still an option?’ The common thread between these issues is Europe’s industrial competitiveness: a special session covered the views expressed below.
Positions of panelists: some convergence, some divergences
Panelists on this topic, from the car industry, a think tank, a federation and the Parliament, agreed on a number of horizontal policies. However, there was no consensus on industrial policy, in the sense of coordinated policies adapted to specific sectors. The session’s rapporteur, author of these lines, also noted the absence of reference to the Commission’s consultation on industrial policy, which ran until August 2012. Mr Tajani, the Commissioner in charge of enterprise, also from the center-right, had featured in an earlier draft programme of the conference.
Wide support was registered for Horizon 2020 (the EU’s new R&D programme), for education schemes like ERASMUS, and for regional or cross-border promotion of industry clusters, such as integrated supply chains between companies.
Martin Wansleber of DIHK (German Chambers of Commerce and Industry) advocated strong industry in the GDP. He highlighted the dual education system, and employment flexibility: ‘If you can’t cut jobs when needed, then you also can’t create any when it’s possible’. He doubted the results of the European Institute of Technology and the ability of banks to finance industry in times of crisis.
Nicolas Veron, from the Bruegel think tank, pointed to overcapacity in sectors like cars, fueled by job subsidies, leading to poor resource allocation and problems for whole branches. For him, the European Commission should indicate the number of plants to be closed.
Gordian Heindrichs of Peugeot-Citroën explained the poor situation of his company. In his view, the Free trade Agreement with Korea amounts to ‘sacrificing the car industry, especially small car producers’. He called for ‘not making the same mistakes with Japan’.
Reacting from the floor, UK Conservative MEP Malcom Harbour stated: ‘industrial policy is back in fashion, also in my country’. He supports working closely with individual companies. For him, research funding and tax incentives can help some European companies to reach global competitiveness, or indeed Japanese and American companies to create competitive plants in Europe. Further, Mr Harbour recommends High Level sector groups like those of the 2005-2009 mandate, including ‘Car 21’ where he was the first ever Parliament representative.
At the plenary session, Minister Schäuble had also stated: Every member state, including Germany, has to take the necessary measures to improve economic competitiveness on a permanent basis because the rest of the world is not waiting for us.” He added: ‘It’s the implementation that is difficult, convincing the sovereign (the people).’ For him, information technologies have changed all organisations and the media, Europe has to adapt to this Century.
The German minister also chastised ‘our Italian sister party’ (Berlusconi’s Popolo della Libertà, PdL) for its responsibility in the current situation.