Crises of confidence. Fears of the disindustrialisation of Europe and the crisis of confidence in the future of European industry are a reality, said Philippe Herzog after a colloquium held last week by the association “Confrontations Europe” to debate industrial problems in the context of the Lisbon Strategy. In his view, the need for a European industrial policy has not yet been clearly recognised by the EU institutions, but it is increasingly demanded by civil society, which wants to see complementarity between the actions of public players and those of business. Mr Herzog feels that the problems of industry should be dealt with at European level (rather than at national level with some kind of vague European coordination). The main ones he referred to are: delocalisations, tax competition, “national champions” (in relation to the application of the rules on take-overs and mergers), State aid, Community funding, the Union's financial perspectives and the concentration of the financial markets in London (with the very active presence of Americans).
A decisive factor. Mr Herzog also referred to trade policy, but did not dwell on it, stating that “Confrontations Europe” would devote a specific colloquium to the issue. I think this semi-silence was a great shame, because for my money, trade policy is an absolutely decisive factor in industrial policy and I note with astonishment and regret that it is regularly left on the sidelines of any debate about industry and disindustrialisation. Even so, it's always there: trade policy determines whether the European textiles sector lives or dies, as it has already decided the fate of a large chunk of shipbuilding and will do for car manufacturing. Nobody wants to go back to protectionism to save businesses that can't adapt to competition, but ecological and (partially) social rules should be brought into trade and counterfeiting should be stamped out (this scourge goes far beyond a purely trade context, often endangering the safety and sometimes even the lives of consumers). We must end up with the absolute priority of free trade over all other considerations. Let's hope Philippe Herzog gets round to organising the promised colloquium very soon.
Differences of opinion. In the meantime, the debate on industrial policy has been kicked off. It already was within the European Commission (see this column of 8 February on transport infrastructure, of 9 February on competition and State aid, and of 10 February on the influence of other policies on industrial activity), and now it is extending to other political authorities and civil society. The debate is a good one, but we must not be run away with by the idea that the guidelines are already unambiguous and unanimous. Mr Herzog was quite right to draw a few conclusions from both days of debates, but the final discussion- summed up in our bulletin of 22 February, pages 12-13- proves just how many questions are still unanswered and just how much opinions differ. In the view of Lord Simon of Highbury, a member of the board of Suez, industrial policy is made by companies and the role of the institutions of the EU, particularly the European Commission, is a very minor one, whilst the chief executive officer of Saint-Gobain, Jean-Louis Beffa, highlighted the role of the “Competitiveness” Council, for which he feels there should be a long-term presidency to allow it to develop a coherent policy. According to Mr Beffa, if Europe drags its heels, national or intergovernmental initiatives should be launched anyway, with no fear of the presence of public money in strategic sectors, even in favour of large companies. Taking the view that the financial markets are not doing their bit, because they don't take risks and don't worry too much about the future, Mr Beffa criticised the power the US wields over the London money market. Lord Simon retorted that in London, it doesn't matter where the money came from or what the nationality of the players may be. Mr Beffa then observed that the United Kingdom makes no bones about defending its strongest industry, that of financial services. Mario Monti pointed out that although he is no champion of the middle ground, he was forced to concede that capital ownership was not exactly a matter of no consequence… He believes that it is possible to create “national champions” in full respect of the rules on mergers, whereas “positive discrimination” in the application of these rules is neither possible nor desirable.
European impetus. Concluding, Mr Herzog called for European impetus and effective tools, because “intergovernmental realism” (which he ascribes to the President of the Commission, Mr Barroso) is short-termist. This major debate is only just starting. The extensive participation of political players and representatives of the social partners at the “Confrontations Europe” colloquium shows just how much interest it has awoken.
(F.R.)