Brussels, 14/10/2011 (Agence Europe) - In a Europe hit by the euro and sovereign debt crisis, the fact that European industry is “in good shape” may contribute to economic recovery, although recovery is still slow and fragile. To this end, member states must promote and monitor structural improvements.
Based on the 2011 edition of two annual reports - one on European competitiveness and the other on member states' competitiveness performance and policies - the new Commission communication on industrial policy, adopted by written procedure on Friday 14 October, comes within the framework of the roadmap for growth presented this week by Commission President Jose Manuel Barroso. It shows that industry, which appears sound, is able to put the European economy back on the path to growth. However, member states must, the European Commission states, rapidly implement policies to accelerate convergence with regard to competitiveness, as there are considerable differences between states, whether in terms of labour productivity, innovative companies or business climate.
EU industry is doing well but it is still outrun by its direct competitors, the United States and Japan, in terms of innovative companies, and in the fields of applications and commercialisation of research and innovation. Although it is ahead of the United States for industrial effectiveness, it is still catching up with Japan given the considerable differences between its member states and manufacturing sectors. Europe is also suffering from over-large differences between its member states when it comes to labour productivity - the productivity per head of worker in the manufacturing sector, which is higher than the EU average in Ireland, the Netherlands, Austria, Finland, Belgium, Luxembourg and Sweden, but lower than the EU average in most of the new member states and Portugal. The corporate legislative framework - which is favourable in Luxembourg, Finland, Estonia, Cyprus, Denmark and Sweden - is less so in Belgium, Portugal, Greece, Hungary and Italy. The Commission adds that, although European industry uses its resources more effectively in non-energy raw materials, by making greater use of recycled products and innovative alternative materials, its competitiveness remains vulnerable to access and price difficulties.
The Commission therefore identifies several key areas where global competitiveness of an industrial sector is to be reinforced to substantially contribute to EU performance - the manufacturing sector being at the origin of 75% of its exports and accounting for 80% of R&D. The European Commission therefore calls for structural changes in the economy to be facilitated, in order to develop knowledge-based innovative sectors (eco-industries and the manufacture of electrical and electronic equipment), and the freeing up of industrial innovation potential by grouping rare resources, reducing the fragmentation of aid systems for innovation, and improving commercial prospects for research projects, with markets for essential generic technology (nanotechnology, advanced materials and industrial biotech) having a strong growth potential (50% by 2015) and job creation potential. The Commission also recommends more sustainability and greater resource efficiency, by promoting innovation and the use of more environmentally friendly technologies, by guaranteeing equitable access and fair prices in the field of raw materials and energy products, and also by improving the interconnection of energy networks. Reduction of red tape, which is a burden on businesses, and greater competition between service providers that use broadband, energy and transport infrastructure, are the other favourite themes of the European Commission, which recommends the use of single market resources, supporting innovative services and implementing legislation such as the “services” directive. Finally, the Commission insists on support to SMEs, by promoting access to financial means and facilitating internationalisation and access to markets, and by reducing payment times.
“European industry is in good shape and ready to compete. However, the slowdown of the recovery should push us to put even further competitiveness and growth at the top of the political agenda. We need structural reforms aimed at freeing the potential of our entrepreneurs, the main actors for recovering”, comments Antonio Tajani, European Commission Vice-President responsible for industry and entrepreneurship. Tajani's absence from Brussels on Friday to present the document adopted was largely criticised by media representatives. (EH/transl.jl)