An industrial reconstruction of the EU is overdue. The subprime crisis started exactly a decade ago and provoked the global financial crisis. As a result of corporate greed and irresponsible behaviour in the financial sector, European industry lost 3.8 million jobs, which is more than 10%. Now the recovery has finally taken ground, we must seize the opportunity to rebuild our industrial fabric, the backbone of our economy providing millions of quality jobs
Since the turn of the century, the EC has re-discovered industrial policy. Regular communications have attempted to define a contemporary industrial policy for the newly created internal market, while at the same time taking into account new challenges such as climate change, energy, digitalisation, globalisation and structural change. The previous communication on industrial policy called ‘For a European Industrial Policy’ was issued in March 2014 by Vice-President Tajani of the former EC. On 13 September 2017, the day on which Juncker delivered his State of the Union speech and following substantial pressure from the Council, the Parliament and stakeholders, the Juncker cabinet updated its industrial strategy for the first time.
In the eyes of the EC, industrial policy has to focus on key topics such as strengthening the internal market; preparing industry for the digital age; making industry stronger through innovation and investment; building on Europe’s leadership in a low-carbon and Circular Economy; supporting the transformation of industry; and ensuring a global level playing field. Most of the industrial policy initiatives taken so far by the current EC fit in this framework. At the same time, the communication announces a number of new initiatives to be taken before the end of this Commission’s mandate.
While industriAll Europe welcomes the updated industrial strategy, it equally feels the need to express certain concerns and demands:
From a macro-economic perspective
Without internal demand, there is no industrial production. In this respect, industriAll Europe calls for completing the architecture of the EMU to avoid future ‘internal devaluation’ of the recent past. This also means that wages must reflect productivity (see the ongoing campaign, ‘Europe Needs a Pay Rise’). Key performance indicators should be set up to make the objective of increasing the share of industry in GDP to 20% of GDP more operational. This share is currently 16.1%, up from 14.7% at the lowest point of the financial crisis. We also reiterate our demand to close the investment gap by fully utilising the budget capacity of Member States whose deficits are <3% of GDP, and by introducing Eurobonds for supporting investments. Free trade must become fair trade by creating a global level playing field. Strengthening trade defence instruments, addressing the problem of subsidised, state-led takeovers of strategic industrial assets and strong provisions while respecting core labour and environmental standards in free trade agreements are key in this respect.
From a social perspective
The employment impact of technological and economic disruptions must avoid mass redundancies that would trigger the decline of entire regions. This is a shared responsibility of all stakeholders . Action plans should be developed for all strategic sectors/supply chains in order to support them in moving up the value chain and to succeed in their journey to becoming more sustainable structures. In the process, a ‘just transition’ should be ensured by monitoring job losses and job creations.
From an innovation perspective
R&D and innovation are key in keeping Europe at the cutting edge of technologies and industrial development. This means further efforts are required to reach the 3% Barcelona objective (currently the EU invests 2.03% of its GDP in R&D). At the same time, a more efficient use of resources can be achieved by further integration of the national R&D systems. For industriAll Europe, the first industrial application of publicly-funded R&D must take place inside the European Union. This can be achieved through increased support at the final stages of the innovation process: pilots and demonstration projects. Furthermore, the tool of Important Projects of Common European Interest (IPCEI) should be mobilised for electronic chips and energy storage, but also for multi-modal, hybrid transport systems, mass customisation of garments or disassembly factories for repair, re-use and recycling.
From an environmental perspective
During the last decade, 1 million jobs were created in the green economy. IndustriAll Europe calls for further development of the toolbox for a sustainable industrial policy, such as an industrialised Circular Economy, where the synergies between industrial policy and environmental policies can be fully exploited. The promise made in the Clean Energy Package to create 900,000 jobs by investing in renewables and energy efficiency must be realised. At the same time, the future of the many energy intensive industries must be guaranteed by addressing the problem of carbon leakage. As the transition to a sustainable economy will also adversely impact employment in carbon-intensive sectors, a ‘just transition’ for the workers affected should be guaranteed. The creation of a ‘Just Transition Fund’ is therefore vital.
From a digitalisation perspective
The use of information technologies in tackling societal needs must be promoted. Simultaneously, the growth power of new ICT-sectors like big data, advanced manufacturing, robotics and the Internet of Things should be leveraged, as well as the synergies between (1) industrial electronics and software and (2) existing European strongholds in industry, to build robust, integrated digital value chains. The concentration of value added in the hands of a few “digital giants” along industrial value chains must be avoided. Most importantly, we demand the EC to address the social dimension of digitalisation impact on the number of jobs, skills gaps, regulating the platform economy, protection of worker-related data,…
An improved governance of the industrial strategy should be achieved by including all stakeholders, among which trade unions in industry, in the upcoming High Level Industrial Roundtable and the Strategic forum for Important Projects of Common European Interest. Finally, industriAll Europe is disappointed that the new communication proves to be a mere revision with a short term horizon to the next European elections (2019). The long term strategy to achieve the 20% objective is still lacking (the figure for 2016 stands at only 16.1%).
“An industrial reconstruction of the EU is overdue. The subprime crisis started exactly a decade ago and provoked the global financial crisis. As a result of corporate greed and irresponsible behaviour in the financial sector, European industry lost 3.8 million jobs, which is more than 10%. Now the recovery has finally taken ground, we must seize the opportunity to rebuild our industrial fabric, the backbone of our economy providing millions of quality jobs”, says Luc Triangle, General Secretary of industriAll Europe.
“We very much welcome the idea of organising an annual Industry Day, of setting up a High Level Industrial Roundtable and a Strategic forum for Important Projects of Common European Interest. IndustriAll Europe is ready and willing to participate in these groups. We will also make use of these bodies for a better integration of industrial policy issues in the different sectoral social dialogues. All this should increase ownership of the challenges for industrial policy amongst all stakeholders, create the right platform for a bottom-up approach and allow for strategic coordination of all actions taken at different levels”, Luc Triangle concludes.
IndustriAll European Trade Union represents the voice of 7 million working men and women across supply chains in manufacturing, mining and energy sectors across Europe. We aim to protect and advance the rights of the workers. Our federation has 177 trade union affiliates in 38 European countries. Our objective is to be a powerful player in the European political arena vis-à-vis European companies, European industries, employers’ associations and European institutions
Most of the industrial policy initiatives taken so far by the current Commission fit in this framework:
- Internal market: an agenda for the collaborative economy, modernisation of the standardisation systems, the Capital Markets Union, the tax avoidance package
- Digital economy: the Digital Single Market Strategy, the Digitising European Industry initiative
- Innovation and investment: the Investment Plan (which will be extended), the strategy for promoting key enabling technologies
- Low-carbon and Circular Economy: the Energy Union, the Circular Economy package, the reform of the Emission Trading System, the creation of an Innovation Fund and a Modernisation Fund to support the energy transition
- Transformation of industry: sectoral action plans for steel, space, rail supply and defence, a high-level group for the automotive industry, the New Skills Agenda with its focus on sectoral blueprints
- Global level playing field: the ‘Trade for All’ – communication calling for a trade policy based on values and materialised in a new series of bilateral free trade negotiations
At the same time, the communication announces a number of new initiatives to be taken before the end of this Commission’s mandate:
- A package to reinforce cybersecurity
- A Regulation on the free flow of non-personal data
- A new series of actions on Circular Economy, including a strategy on plastics and measures to improve the production of renewable biological resources
- A new package for clean, competitive and connected mobility
- Modernisation of the intellectual property framework
- A strategy on sustainable finance to better orient private capital flows to more sustainable investments
- A framework for the screening of foreign direct investments that may pose a threat to security or public order
- A revision of the rulebook on market surveillance
- Deployment of the next generation of mobile telecommunications connectivity (5G)
- Better coordination of industrial policy amongst public authorities in order to strengthen strategic value chains in new technologies e.g. by Smart Specialisation policies