On Wednesday 4 February, Finland, Sweden, the Netherlands, Estonia, Lithuania and Latvia warned the European Commission against implementing the concept of ‘European preference’ too rigidly, particularly in the areas of public procurement (see EUROPE 13704/3) and foreign direct investments.
They fear that this principle runs counter to the principle of regulatory simplification.
Along with several other Member States, these six countries have submitted a non-paper ahead of the informal Alden Biesen Summit, on 12 February. Firstly, they believe that the EU has everything it takes to become competitive again, provided it takes bold measures.
“The IMF and ECB estimate that internal market barriers correspond to tariffs of around 100–110 percent on services and 45–65 percent on goods. Business as usual is not enough anymore”, they write.
European companies “struggle to comply with burdensome and complex rules, long permitting processes, and fragmented regulation. We need to give them much-needed relief and continue an ambitious simplification agenda with focus on reducing burdens”, say these countries.
Calling for “legislative restraint”, they believe that the simplification programme is also “highly relevant in connection to the recent push for European preference, which could risk adding another layer of complex regulation”.
Widespread application of European preference “risks wiping out our simplification efforts, hindering companies’ access to world-leading technology, hampering exchange with other markets and pushing investments away from the EU”.
Acknowledging that stronger, targeted measures are sometimes necessary to strengthen European independence, these nevertheless need to “be limited, proportionate and based on a clear understanding of the consequences”.
The document also calls on the EU to pursue free trade agreements and trade with like-minded partner countries, in particular to reduce high-risk strategic dependencies and strengthen economic security. “We have signed the Mercosur agreement – and must apply it provisionally as soon as possible”, these countries add.
The document goes on to stress the need to “mobilise more private capital”. And, of course, impetus needs to be given to the single market through concrete measures on the mutual recognition of services or by extending the number of automatically recognised professional qualifications.
A “28th regime (is needed) to allow European companies to set up, grow and operate in the Single Market with lessened administrative burdens”.
Link to the document: https://aeur.eu/f/kl8
The IAA is still scheduled for 25 February. Already in place in the defence and automotive sectors, the concept of ‘European preference’ will be a key element of the forthcoming Industrial Accelerator Act (IAA), a regulation that will propose certain conditions for European content or workforce in the allocation of European public funds in strategic sectors such as clean industries. At this stage, the presentation of the IAA is still scheduled for 25 February.
The Commission has already planned to target the measures and rejected a generalised concept, but has yet to define the sectors and procedures for these ‘restrictions’. The inclusion, for example, of digital technologies, steel, which already has safeguards, and low-carbon hydrogen has not yet been decided.
On 5 February, the Contexte media outlet published Germany’s position on the IAA. Berlin would like to limit European preference to particularly strategic and threatened sectors, subject to strict conditions. This should be limited in time and defined as broadly as possible. (Original version in French by Solenn Paulic)