Strasbourg, 04/02/2009 (Agence Europe) - In the wake of the financial crisis, the automotive industry is experiencing major difficulties, but "it is not at the edge of the precipice, it is and can continue to perform". This was the message of Günther Verheugen, who presented the European Parliament with the communication of the European Commission on the situation in this sector. The president of the Council, Alexandr Vondra, who spoke before him, said that European cars remain the best, the most efficient and safest. But this sector has been hit hard by the global financial crisis and, despite efforts to boost demand, this fell 8% in 2008. The trend is unlikely to be bucked in 2009 and public support is required. Mr Vondra stressed that this aid (innovation) must be coordinated and targeted and avoid a subsidy race and market distortions. The Council supports the Commission as regards the swift creation of a relaunch plan. One of the questions to be examined is that of loans (how to facilitate these without harming competition), another is environmental protection (aid to "green" cars). A number of instruments are available immediately, such as aid to break up old cars, already used in some states. The Council would like to have proposals from the Commission on this point before the Spring Competitiveness Council.
The crisis, said Commissioner Verheugen, is the manifestation of a lack of confidence in the economy: consumers are behaving like businesses and "holding on to their money". But the figures show how important this sector is: 6% of all jobs in the EU, number one for exports, 4% for research and development compared to 2% in other industries. But production has dropped sharply and the situation is even more dramatic for heavy goods vehicles, the commissioner continued, with a clear over-capacity (20% or more, representing a threat for 400,000 jobs). It has not been ruled out that a number of producers will have disappeared from the market by the end of the year: they "can stay in the race" if their productivity increases, but this may have negative effects on employment. The Commission's goal, however, remains to keep all European producers' heads above water: it is trying to make a contribution to this objective with loans from the EIB (€9 billion), but it would struggle to do more than this. The Commission is also making sure that aid measures are not harming competition, for example in the cases of European subsidiaries of American businesses, which may only receive aid if this is used to keep jobs in place in Europe. As for car breaking premiums (which have had a positive effect in the countries which have introduced them), these could be accompanied by "green" targets. We will see what President Obama decides for the automotive industry, Mr Verheugen concluded, but in any case it is clear that Europe has no interest at stake in the debacle of the American automotive industry.
The proposals made are not up to scratch and may encourage the member states to go it alone, said the French MEP Jean-Paul Gauzès of the EPP-ED Group. A coordinated response is vital and urgently needed regarding the measures already taken by some states, continued Mr Gauzès: it is not just a question of limiting the impact of the crisis, but of properly relaunching this sector, by developing a "culture of anticipation". On behalf of the Socialist Group, the Italian Guido Sacconi noted that 2 million jobs (mostly in assembly and sub contracting) may be lost in the automotive industry: the Commission's relaunch plan is therefore a good thing, but he feels that intervention should be made at the level of demand, with a kind of "anti-cyclical action". And the member states do what they want... The fall in registrations, lamented the Italian MEP Patrizia Toia on behalf of the ALDE Group, has recently risen from 20% to 33% depending on the country, and it is therefore vital to support demand and facilitate loans. Action must be taken even beyond the relaunch plan, because the future of European producers is a "joint destiny" in the face of global competition. It is not just about saving jobs, but about keeping in place the competitiveness of the automotive sector, said the Latvian Guntars Krasts (UEN), and Germany's Rebecca Harms (Greens/EFA) agreed that the crisis could only be resolved if the problems of environment and sustainability are addressed at the same time. We should make smaller, more efficient, greener cars, by agreeing on an energy and transport policy for all 27. On behalf of GUE/NGL party, Italy's Roberto Musacchio highlighted the social aspect of this crisis, which is hitting older and less qualified workers, and Patrick Louis (Ind.dem, France) said that in the face of delocalisation and social dumping, the solution lies in bringing back countervailing duties at the borders.
"It would be good for the European Commission to present a European plan" aiming to coordinate national aid measures to the automotive sector, Czech Deputy Prime Minister Alexandr Vondra told the press in Strasbourg on Wednesday 4 February. National car breaking premiums aiming to support the automotive market, which certain member states (Spain, France, Romania...) have already taken, bring about the risk of creating competitive distortions within the single market. "The Commission, which is the guardian of the game rules, must at all costs make proposals", stressed the minister. He highlighted the seriousness of the situation: production fell "8%" in 2008 and "prospects for 2009 are even worse". He went on to announce the creation of a working group on the automotive industry, made up of political decision-makers and representatives of the industry, and which will be chaired by Czech Minister for Industry and Commerce Martin Øíman. (M.B./L.G./transl.fl)