European industry review reveals serious weaknesses

The European commission has published two industrial competitiveness reports, showing that industry's role in the EU has fallen within the last year, but that the member states have made progress on improving the bloc's business environment.

 

By Christopher Ball

27 Sep 2013

The commission reports, published on Wednesday, note, however, that a number of serious issues remain and are preventing the recovery of European industry in light of the economic crisis. These include problems relating to access to finance, high energy prices, a lack of a skilled workforce and burdensome red tape.

The EU launched the EU 2020 agenda in an attempt to resolve the lack of competitiveness of its economy and aimed to ensure that 20 per cent of the EU economy came from industry by 2020.

While this remains an ambition, EU industry and entrepreneurship commissioner Antonio Tajani accepted that: "We remain a long way from the 20 per cent target for 2020 as put forward by the commission in 2012. The commission has taken several initiatives to address high energy prices, difficult access to credit, drop in investments, lacking skills, and red tape.

"And we will come forward later this autumn with an industrial initiative to go further and boost action in this field. This should be a catalyst in view of the February 2014 European council in order to significantly strengthen the growth and competitiveness for industry. The commission will submit its contribution to the European council in the next few weeks".

The issue of high energy costs was central to the two commission reports and was also high on the agenda of the competitiveness council this week. Prior to the council meeting, BusinessEurope called for a "revised approach to energy and climate change policy... to ensure competitiveness and growth".

Both the commission reports and the competitiveness council highlighted the impact of high energy prices, which are contributing to deindustrialisation and hampering Europe's ability to compete with the US, notably in the energy intensive chemical sector.

Whilst the US has seen a large reduction in energy costs following the shale gas revolution, the EU has not been able to harness these new techniques to the same degree. With this in mind, the commission believes that resource efficiency is the answer, despite the fact that the member states have in general failed to meet their energy efficiency goals.

[pullquote]The commission believes that the future of EU industry has to be clean and high tech if it is to compete at the global level[/pullquote]. The ministers agreed on the importance of "a number of priority actions that could significantly improve the current framework conditions and facilitate industrial cooperation between member states, notably in the fields of access to markets (both internal and third country markets), standardisations and interoperability, innovation, skills and human capital, access to finance, energy markets, and access to raw materials".

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