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Brussels, |
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EU ministers give industrial policy line to von der Leyen
EU ministers have outlined an industrial agenda for the future European Commission that prioritizes competitiveness, innovation, energy transition, and digitalization, with a key focus on creating high-quality jobs. This agenda diverges from Ursula von der Leyen's vision of a military industrial strategy, emphasizing instead a growth-oriented approach that benefits all. The ministers' conclusions stress the importance of leveraging Europe's strengths to build a sustainable and resilient industrial future, rejecting the notion of an industry geared towards warfare. This is to reaffirm the foundational principles of the European Union, based on peace, prosperity, and growth.
Contradicting the direction von der Leyen wanted to give to the future Commission, which seemed more like her electoral manifesto than a legacy, EU ministers have made several key requests for the next European Commission. They seek the identification of strategic priorities in industrial research and innovation, focusing on critical technologies. Emphasis is placed on accelerating the green and digital transitions to boost competitiveness. The ministers also request improved access to finance, including the enhancement of private and public financial instruments and the assessment of existing funding mechanisms. Additionally, they call for the creation of favorable framework conditions, such as a clear regulatory framework and a skilled workforce. Finally, they urge the development of a comprehensive industrial policy aligned with the Union's green and digital goals, and an evaluation of the effectiveness of the financial toolbox for industry.
By Charles STRASS
Brussels, 31 May 2024 - 6 MINUTES READ
Brussels, 31 May 2024 - 6 MINUTES READ
Somewhat quietly and without much media coverage, EU ministers determined the political trajectory that the new European Commission must follow for the future European Industrial Strategy.
In effect, they rejected the idea of outgoing Commission President Ursula von der Leyen, who in March this year, without input from the European Parliament, presented her strategy for creating a European military industry, perhaps recalling her past as Germany's defense minister.
EU ministers held a different view. They adopted conclusions titled "A Competitive European Industry Driving Our Green, Digital, and Resilient Future," (read the document below), emphasizing the need to prioritize the competitiveness of European industry while setting aside military issues. This sets the stage for a new European competitiveness deal under the next European Commission and can be seen as an implicit rejection of von der Leyen's candidacy for the European Commission. It is difficult to draw such conclusions now.
In effect, they rejected the idea of outgoing Commission President Ursula von der Leyen, who in March this year, without input from the European Parliament, presented her strategy for creating a European military industry, perhaps recalling her past as Germany's defense minister.
EU ministers held a different view. They adopted conclusions titled "A Competitive European Industry Driving Our Green, Digital, and Resilient Future," (read the document below), emphasizing the need to prioritize the competitiveness of European industry while setting aside military issues. This sets the stage for a new European competitiveness deal under the next European Commission and can be seen as an implicit rejection of von der Leyen's candidacy for the European Commission. It is difficult to draw such conclusions now.
The Council Conclusions
Read the Conclusions
EU Ministers analyzed the critical current state of the EU's industrial sector, exploring ways to enhance innovation, access to finance, and the business environment for manufacturers. They proposed key principles to guide the EU's future industrial policy, aimed at leveraging the Union's ambitious goals for digital leadership and climate neutrality to foster industrial leadership and create high-quality jobs.
EU Ministers almost ignored Ursula von der Leyen's proposals for a defense industry, instead urging the Commission to make up for lost time so far, emphasizing several specific requests for the future European Commission:
EU Ministers almost ignored Ursula von der Leyen's proposals for a defense industry, instead urging the Commission to make up for lost time so far, emphasizing several specific requests for the future European Commission:
- Identification of Strategic Priorities: The Commission is asked to identify a limited number of strategic priorities in the EU's industrial research and innovation policy, focusing on technologies critical to economic security.
- Support for Green and Digital Transitions: Emphasis on accelerating green and digital transitions to enhance European competitiveness.
- Improving Access to Finance: Explore ways to enhance private and public financial instruments while maintaining competition and state aid policies. This includes advancing the Capital Markets Union and utilizing existing tools like the European Investment Bank and the InvestEU program.
- Evaluation of Existing Funding Mechanisms: Assess and improve existing European funding mechanisms, and explore structural ways to increase private investment.
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EU's Competitive Edge in Focus The adopted conclusions provide a robust framework for the future of EU industrial policy. A clear message to the next European Commission, which will be elected by the European Parliament in autumn 2024. In the face of significant technological, economic, and geopolitical shifts, the EU Ministers say that Europe needs a strong and competitive manufacturing base to drive innovation, productivity, sustainability, and growth. During last years, the EU industry has faced numerous challenges, including increased global competition and consecutive crises such as the COVID-19 pandemic, the war in Ukraine and rising tensions in the Red Sea. These crises have strained supply chains and driven up energy prices. The Ministers stress the importance of the green and digital transitions, recognizing both the opportunities and challenges they present for companies and citizens alike. Priority is recommended for technologies critical to the EU's economic security, ensuring the Union remains at the forefront of global industrial innovation. |
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Innovation as the Cornerstone of Competitiveness
Innovation is highlighted as the driving force behind European competitiveness. The conclusions call for identifying a limited number of strategic priorities in the EU's industrial research and innovation policy. A major task for the next Commission will be to bridge the 'innovation paradox,' where knowledge does not always translate into marketable products and services.
Strengthening Financial Foundations
Finance is a crucial element of the EU's industrial policy. The conclusions explore ways to enhance private and public finance instruments while preserving competition and state aid policies. Key recommendations include advancing the Capital Market Union and utilizing existing instruments such as the European Investment Bank, cohesion policy, important projects of common interest (IPCEIs), and the InvestEU programme. The Council also calls for evaluating and, if necessary, improving existing European funding mechanisms and exploring structural ways to increase private investment.
Enhancing the Business Environment
Creating the right framework conditions for industry success is essential. This includes ensuring a well-functioning single market, a clear regulatory framework, a sustainable and secure energy market, a highly skilled workforce, an open trade policy, and robust intellectual property protections. These conditions will enable industries to thrive in a competitive global market.
A Vision for Comprehensive Action
This is the more important strategic view. The Council's conclusions advocate for a comprehensive European industrial policy aligned with the Union's green and digital priorities. The future policy framework should be based on evidence-based tools, metrics, market principles, and economic forecasts. It should incorporate environmental, sustainability, resilience, and social factors into its models to identify strategic future growth markets.
The EU's future industrial policy will build on the existing 2020 EU industrial strategy, the 2021 green deal industrial plan and the digital decade. It will also consider recent legislation, including:
Commitment to Long-term Competitiveness
The European Council, in its conclusions of April 2024, reaffirmed the Union's commitment to long-term competitiveness, prosperity, and global leadership. Developing an effective industrial policy is crucial to achieving these objectives, ensuring that the EU remains a leader on the world stage.
As Europe faces unprecedented challenges and opportunities, the adoption of these conclusions marks a pivotal moment in shaping a future-ready industrial policy that drives innovation, sustainability, and resilience across the continent.
Innovation is highlighted as the driving force behind European competitiveness. The conclusions call for identifying a limited number of strategic priorities in the EU's industrial research and innovation policy. A major task for the next Commission will be to bridge the 'innovation paradox,' where knowledge does not always translate into marketable products and services.
Strengthening Financial Foundations
Finance is a crucial element of the EU's industrial policy. The conclusions explore ways to enhance private and public finance instruments while preserving competition and state aid policies. Key recommendations include advancing the Capital Market Union and utilizing existing instruments such as the European Investment Bank, cohesion policy, important projects of common interest (IPCEIs), and the InvestEU programme. The Council also calls for evaluating and, if necessary, improving existing European funding mechanisms and exploring structural ways to increase private investment.
Enhancing the Business Environment
Creating the right framework conditions for industry success is essential. This includes ensuring a well-functioning single market, a clear regulatory framework, a sustainable and secure energy market, a highly skilled workforce, an open trade policy, and robust intellectual property protections. These conditions will enable industries to thrive in a competitive global market.
A Vision for Comprehensive Action
This is the more important strategic view. The Council's conclusions advocate for a comprehensive European industrial policy aligned with the Union's green and digital priorities. The future policy framework should be based on evidence-based tools, metrics, market principles, and economic forecasts. It should incorporate environmental, sustainability, resilience, and social factors into its models to identify strategic future growth markets.
The EU's future industrial policy will build on the existing 2020 EU industrial strategy, the 2021 green deal industrial plan and the digital decade. It will also consider recent legislation, including:
Commitment to Long-term Competitiveness
The European Council, in its conclusions of April 2024, reaffirmed the Union's commitment to long-term competitiveness, prosperity, and global leadership. Developing an effective industrial policy is crucial to achieving these objectives, ensuring that the EU remains a leader on the world stage.
As Europe faces unprecedented challenges and opportunities, the adoption of these conclusions marks a pivotal moment in shaping a future-ready industrial policy that drives innovation, sustainability, and resilience across the continent.
