The European Commission wants to renew its strategic approach to the industrial fabric and value chains within the Union, in particular by taking better account of SMEs. To this end, the institution plans to launch an Industry Forum by September to develop an "ecosystem" approach, as announced during the presentation of a series of papers on Tuesday, March 10.
Objective: to better grasp the challenges and needs of the various ecosystems, particularly in relation to the green and digital transition and, above all, to better equip the European industrial and economic fabric in the face of increasingly threatening and often unfair international competition.
The document describing the industrial strategy, which turns out to be rather short (16 pages), has evolved considerably since its first versions (see EUROPE 12418/2), under the impetus of the new internal market commissioner, Thierry Breton, not always without clashes with other commissioners, notably on the question of competition in the face of liberal Margrethe Vestager, Vice President of the Commission, according to several sources. A sign of the importance of the text: while at the beginning, the provisional versions circulated within the Commission, little by little restrictions were imposed, to the point that the latest versions of the document were only available for consultation in a dedicated reading room on the Commission's premises, we are told.
One of the major innovations would thus relate to this "ecosystem" approach advocated by Mr Breton, even if, according to Mrs Vestager, many similarities would have to be found with the bottom-up sectoral approach contained in the previous industrial strategy (see EUROPE 11861/5).
The number of ecosystems has yet to be determined - it could be as many as 15, the Commissioner said - through an "inclusive governance" exercise with the establishment of an Industry Forum before or after the summer, he said. The industrial forum will be composed of representatives of industry, including SMEs, large companies, social partners, researchers, as well as representatives of Member States and EU institutions.
The objective, explained Commissioner Breton, is to identify specific measures based on specific needs and challenges. This support could take the form of regulatory action, release of funds or optimal use of trade defence instruments, explained Vice President Vestager at the press conference.
Chinese and American threats
The European Commission wants to return to more proactive industrial policies in the face of international competition, which, with China and the United States, is becoming increasingly threatening and is often unfair because it is heavily subsidised by public funds and does not apply the principles of reciprocity.
For Commissioner Breton, we must therefore stop taking the final price and the consumer as the only parameter and better integrate the issues related to the strategic autonomy of certain sectors. The coronavirus crisis (see other news) has shown, for example, that 80% of the active ingredients in European medicines are produced in China. Hence the need to relocate certain productions to Europe, Breton explained, citing the concept of "glocalisation".
To this end, the Commission intends to launch an action plan to secure strategic raw materials, as well as a new strategy in the pharmaceutical sector and a series of initiatives to develop strategic digital infrastructures and critical technologies in robotics, microelectronics, high-performance computing, blockchains, quantum technologies, biotechnology, nanotechnology and other advanced materials.
In the face of international competition, the Commission intends to review its copy in the field of competition. In 2021, the Commission plans to adapt the EU competition rules, and in parallel it is carrying out the evaluation of merger control and the monitoring of compliance with the State aid guidelines.
In addition, a white paper will be presented in mid-2020 to address the distorting effects of foreign subsidies in the Single Market, and in doing so, the institution hopes to tackle foreign access to EU public procurement and funding. The issue of foreign subsidies will be addressed in a proposal for a legal instrument in 2021.
This instrument will go hand in hand with ongoing work to strengthen global rules on industrial subsidies in the World Trade Organization and with actions to address the lack of reciprocal access to public procurement markets in third countries.
Strategic Alliances
As part of the analysis, the European Commission does not rule out the use of industrial alliances, as has been done in the battery sector (see EUROPE 12233/23). Mr Breton explained that four other alliances were in the offing, first in hydrogen, then in low-carbon industries, then in the cloud sector, and finally on crucial raw materials located in Europe.
An EU representative for SMEs
The industrial strategy does not come alone, it is backed up by the strategy for SMEs (the broad outlines of which were detailed in EUROPE 12431/11), which is described in some twenty pages. The strategy remains structured around three pillars aimed at strengthening the capacity of SMEs to make a successful green and digital transition, reducing administrative and regulatory burdens (in particular by combating the phenomenon of 'gold plating') and facilitating access to finance.
Among the many initiatives are: - the modernisation of the Enterprise Europe Network (EEN), which will be flanked by specialist advisers in the field of green transition; - the extension of digital innovation poles in all regions of Europe; - the establishment of an army of "volunteers" in the digital domain; - an initiative focused on the collaborative economy, particularly in short-term rental housing; - the 'Cassini' initiative to create a European 'New Space'; - an initiative called "Start-up Nations" to encourage the exchange of good practices to facilitate the creation of start-ups and the expansion of SMEs (scale-up).
On the access to finance front, the Commission also intends to revise the Late Payments Directive and to facilitate the rapid execution of payments through the establishment of a new virtual observatory. The institution also wants to set up a fund to assist the IPO of SMEs under the InvestEU financial instrument.
Above all, the Commission intends to set up a representative for SMEs (SME Envoy), which has yet to be appointed by the College of Commissioners. Its role: to filter EU initiatives to better take into account the SME perspective by drawing on the national expertise of the network of SME representatives.
A well-functioning internal market
Finally, the European Commission wants to tackle the malfunctioning of the internal market by drawing up a report setting out existing obstacles and adopting an action plan on the implementation and enforcement of single market rules. Here, among the 22 planned actions (recently detailed in EUROPE 12438/6), is the creation of a Single Market Enforcement Task-Force (SMET) composed of representatives of Member States and the Commission.
SMET will hold regular meetings to assess the state of compliance of national legislation with Single Market rules, but also to prioritise the most pressing obstacles to the smooth functioning of the Single Market and to tackle unjustified 'gold plating'. The working group will monitor the implementation of this action plan and regularly inform the Competitiveness Council and the European Parliament's Committee on the Internal Market and Consumer Protection.
On Wednesday 11 March the Commission will present an Action Plan on the circular economy (also detailed in our pages - see EUROPE 12441/4), which will set out the framework for the European Commission's overall action in the economic field in the coming months and years. (Original version in French by Pascal Hansens)