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Europe urgently needs a coherent economic policy agenda

The EU is in danger of falling behind in the global economy. International economic organisations expect the EU to grow by just five percent this year, while the USA is projected to grow by seven percent and China by more than eight percent. Amidst the severe economic crisis, the EU’s failure to develop a coherent economic policy agenda now comes back to bite her. This failure must be corrected quickly.

So far, the focus of the EU institutions is mainly on the Green Deal. The political discussion centred on climate and environmental policy visions and increasingly ambitious targets. Meanwhile, the EU Commission's economic policy agenda "An economy that works for people" resulted mainly in socio-political initiatives.

Despite the Corona-Crisis - Business as usual in Brussels

The most severe economic crisis since the beginning of European integration has not yet led to a coherent economic policy agenda in Brussels. On a positive note, the EU deserves credit for its multi-billion-euro reconstruction programme NextGenerationEU. However, regarding the important regulatory agenda, it is business as usual. Besides the measures to implement the tightened EU climate targets for 2030 the Commission's 2021 agenda is shaped, among other things, by its plans for sustainable corporate governance. The announcements of Justice Commissioner Didier Reynders and the demands of the European Parliament on this matter cause us to expect considerable additional burdens on industry, especially on SMEs.

Towards a modern and bold industrial strategy

In spring 2021, the European Commission took a first important step towards an ambitious economic strategy. Against the backdrop of the Corona pandemic, the Commission presented an update of its disappointing 2020 industrial strategy. The new strategy no longer narrows the industrial policy challenges to the Green Deal and addresses industry across the board - small and medium-sized enterprises, mid-caps and listed corporations alike. The Commission announces new concrete initiatives to strengthen the single market, including in the area of industry-related services, and presents a helpful analysis of Europe's strategic dependencies on third countries. What remains unclear, however, is how the European Commission intends to support industry in the ecological transformation.

The BDI calls on the EU institutions to quickly turn the industrial strategy into an industrial policy plan with concrete measures. The EU should prioritise the following initiatives

  • Enable private investment into climate-protection technologies
  • Support emission reductions in the mobility sector
  • Develop an import strategy for renewable energy sources
  • Clarify carbon leakage protection in the least burdensome way
  • Revise the legal and financial framework for key projects of European interest (IPCEIs)
  • Launch a second IPCEI on microelectronics quickly in 2021
  • Promote hydrogen
  • Revise competition law
  • Make 5G applicable to industry while already considering 6G
  • Create legal certainty for the General Data Protection Regulation
  • Promote a European platform ecosystem and push ahead swiftly with common European data spaces.

Swiftly implement strategy for better regulation and bureaucracy reduction

At the end of April 2021, the European Commission presented its long overdue strategy in the area of better regulation and the reduction of bureaucracy. The Commission should have presented a communication on this as early as May 2020. 

The BDI expects the European Commission to swiftly implement the strategy. Europe must focus on transparency, evidence-based impact assessments and broad stakeholder participation. Particularly in the case of measures to achieve the 55 percent climate target, legislators should ensure acceptance by businesses and citizens with evidence-based legislation.

When it comes to reducing bureaucracy, the European Commission has failed to make a big impact. Businesses are suffering from the escalating bureaucratic burden. The announced 'one-in-one-out' mechanism is a bitter disappointment. Industry had expected the Commission to apply the 'one-in-one-out' rule to all previous legislative proposals, not just from 2022. Brussels must keep its promise and reduce an existing burden in the same policy area for every additional burden.

A strong Europe depends on a strong industry

The European Commission has taken around one and a half years to develop the first approaches to an economic strategy with the update of its industrial strategy and its paper on better regulation. Crucially, the Commission should move much more decisively and swiftly in implementing its strategies. For the future of Europe is inextricably linked to the future of industry. A strong and innovative industry is a prerequisite for Europe to co-shape global issues of the future, such as the green transition or digitalisation, with its own technologies and concepts, and on an equal footing with the United States and China. A strong Europe will only exist with a strong industry.

 

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