Brussels, 11/06/2013 (Agence Europe) - Thirty-six years after the Davignon plan, and eleven years after expiry of the ECSC treaty, Europe is presenting an action plan in support of its suffering steel industry.
On Tuesday 11 June, the Commission unveiled a Community action plan for kick-starting a steel sector that is being put to a hard test given the contraction in the demand for steel in the EU, fierce competition globally, and energy bills that are constantly on the rise.
Presenting the plan on the sidelines of the European Parliament plenary session in Strasbourg, Antonio Tajani expressed confidence in the “promising future” of the steel industry in Europe, albeit faced with overcapacity at world level. “By continuing to lead in innovative products, its traditional strength, it can achieve a globally competitive edge”, the commissioner said, confident that his plan will give fresh impetus to the EU's industrial sector. He believes industry will deliver 20% of GDP by 2020, after falling to below 16%.
Closely linked to major sectors downstream ,such as the motor industry, construction, electronic engineering, mechanical and electrical engineering, the steel industry has a very marked cross-border dimension in Europe, where 500 production sites are spread out over 23 member states.
Given the strong contraction in domestic demand, European production plummeted by over 30% between 2006 and 2009 to remain, in 2012, at 83% of its 2007 level, entailing overcapacity of 20-25%. Employment in this key sector, which employs 360,000 and which has a turnover of over €170 billion, fell by 10% between 2007 and 2011. Also, although the EU remains the second largest steel producer worldwide (177 million tonnes of steel annually, i.e. 11% of global production), its market share has dwindled from 22% to 12% - while China's market share climbed from 8% to 45% between 2001 and 2011.
The Commission remains confident, however. According to the OECD, global demand for steel is expected to climb to 2.3 billion tonnes by 2025, mainly in the construction, transport and mechanical engineering sectors, especially in the emerging economies. This is an opportunity not to be missed!
The action plan for steel, the first of its type from the European Commission since the Davignon Plan of 1977, does not envisage any direct aid, aiming instead to encourage demand in areas downstream, particularly the car industry, green cars, sustainable construction and low-energy buildings. It also proposes to stimulate demand in markets outside the EU by fighting unfair competition and ensuring access to crucial raw materials markets. The scrap metal markets will be monitored to ensure security of supply for European steel firms using it as raw materials.
The Commission pledges to reduce the cost of EU regulations on industry. The overall regulatory burden and its impact on competitiveness will be assessed later this year. The Commission wants the costs of energy used by the steel industry to be affordable and expects much of the putting on place of an internal energy market and diversification of supply, and pledges to advise industry on long-term electricity supply contracts to boost cost predictability.
The action plan includes targeted measures to back jobs in the industry and support restructuring to ensure that highly qualified labour remains in Europe. Support for R&D programmes is also planned for innovative projects and new types of steel.
A new high-level group will be given the job of supervising implementation of the action plan, which will be assessed in a year's time to ensure it is on track. (EH/transl.jl/fl)