Fashion and reality. It is rather fashionable to say that Europe has no industrial policy. Very often, those who decry this deficiency are same people who have long opposed all attempts to define this policy (the very words "industrial policy" were long banned fromEuropean discourse). But the reality of the situation can be summed up in two points:
- the EU cannot take on an all-encompassing, inflexible industrial policy doctrine, because situations (as well as election results, both national and European) change. The institutions of the Union should not freeze the criteria and modalities of European action;
- the EEC always had an industrial policy and now the EU is making more of it than ever. One need only think back to the restructuring of the steel industry, and now, the draft legal framework for the chemical industry, the draft for the textiles and clothing industry (very interesting, as it groups together a whole range of possible actions), the strategic guidelines for the defence industry, the announcement of a White Paper for the space sector, the programme being prepared for shipbuilding.
It is acknowledged today that these initiatives all come under the heading of industrial policy. But Europe was already doing this before it was allowed to. It stepped in to break up combines, decided for or against various mergers, banned competition-distorting State aid, authorised aid for restructuring- all of these are industrial policy actions, as are the social norms, parts of which aimed at preventing artificial delocalisation, most environmental standards, patent protection and various aspects of company law, and this can also be said of parts of trade policy, such as the anti-dumping rules and initiatives to fight counterfeiting.
Dawning realisation. What's new is that Europe is becoming aware of the importance of the manufacturing industry. Producing goods for people and their comfort should remain the priority. Happily, the theory of the "new economy" (information and company technologies) and services taking the place of producing goods in Europe has lost its charm and its unfortunate allure. Information technology and services represent two pillars of the European economy, but they lose much of their meaning and future prospects if they are not based on a solid foundation of manufacturing. Who would "business services", a mainstay of employment, be aimed at, if the basic industries collapse? Information technology and services are partly "accessory activities" to the manufacture of goods. Ignore the statistics which play down manufacturing's contribution to the European Union's GDP, because they belie reality. Don't make the mistake of considering agriculture an "activity in decline", forgetting about its many vital functions.
Rejection of "policy of assistance". But this new awareness should not lead to a tendency towards a kind of policy of assistance. Europe should contribute towards the creation of conditions favourable to industrial development and the prosperity of businesses, but businesses should stand on their own two feet. Business leaders often tend to blame the state for their problems and shortcomings, but they should do their bit, by removing the breath-takingly scandalous abuses in managers' salaries, and by getting out of the habit of clamouring for State aid at every possible opportunity. "As well as distorting competition, State aid to business provides strong incentives for companies to relocate to countries which hand it out", said Competition Commissioner Mario Monti. This isn't the kind of flexibility industry should expect. The European currency should certainly help towards healthy European industry, but by relaunching trans-European networks, by supporting research/development and by life-long learning, and by other cross-cutting instruments, and certainly not by direct aid as a matter of course.
Three trade policy guidelines. One area in which the institutions of the EU should remain active, and even step up their involvement, is in trade policy, in three directions: subsidising the reciprocal opening up of the European market (except for the least developed countries on the UN list): keeping the pressure on the WTO regarding the "Singapore subjects" (which should not be considered null and void); step up the fight (still too faint-hearted) against bootlegging and other abuses. This is how the Union will continue with its industrial policy like Molière's "bourgeois gentleman" writing his prose: without even realising.
(F.R.)