A new industrial policy strategy for Europe needs to be sustainable German Green MEP Reinhard Bütikofer says. New policy instruments such as a soil directive should be adopted, he argues.
Reinhard Bütikofer is the speaker of the German Greens in the European Parliament, deputy leader of the parliamentary group and treasurer of the Greens/European Free Alliance. He formerly led the Green party in Germany. A member of the committee for industry, research and energy (ITRE), Bütikofer is a transatlantic adviser for the Heinrich Böll Foundation, and – since 2009 – has served on the board of Europa-Union Deutschland, the German branch of the Union of European Federalists. He spoke to EurActiv’s Jeremy Fleming in Brussels.
What is the most important piece of upcoming policy needed for kick-starting industry?
I think we should focus on industrial policy, and the forthcoming industrial report being revamped by the Commission for later this year, because this is probably one of the most contentious issues in the sphere of economic policymaking presently.
When the predecessor [report on Industrial strategy] came out in 2010, we welcomed it. This is because we wanted to create an environment that is conducive to re-industrialising Europe and overcoming some of the impediments we have run into using the present development model, most particularly with regard to the environment and climate change. So sustainable re-industrialisation is exactly the right topic, because we have to re-industrialise and promote competition. Industrial policy involves the environment and many other sectors, so we have to have a comprehensive response.
Why do you think that the environment should be central to industrial policy?
In the context of the relationship between industry and the environment, there is no such thing as a free lunch, and with the environment, we are not currently internalising the external cost of environmental protection, so someone else is paying for the lunch.
Lets put a price on carbon and then – by creating that framework condition – make industry compete over who can deliver energy efficiency. That would be an important change in our policy approach. Presently the polluters are achieving a market advantage.
What other policy approaches are required for industrial regeneration?
Let’s talk about the raw materials issue. Traditional industries that rely on raw materials – and particularly those that import raw materials from other areas – are highly exposed to volatility in raw materials prices. That’s why they hedge – and all good businesses do that. Of course, in recent years, many financial actors have also moved into that activity and – on top of bona fide hedging – you also now find undue speculation. This is putting the real economy under undue pressure, volatility has increased two- or threefold as a result, and we should work on this. In the context of the Markets in Financial Instruments Directive we have imposed some conditions to protect bona fide hedging, but we need to defend against undue speculation.
What more can be done to convert the decaying urban industries and convert these?
I would tend to also include in the scope of possible actions a renewal of the effort to get a new soil framework directive under way. That has been a goal pursued under different EU presidencies since 2007, but there has never been enough political agreement to further it. It also met with a blocking minority in the Council because of traditional opposition from Austria, France, Germany, the Netherlands and the UK. Some concerns cited as rationale for that blockade were tied into subsidiarity and fears of an overlap with national legislation. If you take a step back, however, that can hardly be a major problem because not many states have such legislation.
In Germany, for example, the resistance to introducing legislation has eased in the upper house of parliament, the Bundesrat. In the past the Bundesrat has blocked it, but the majority in that chamber has changed since that last happened. My group [the Greens] in the Bundestag [lower house of parliament] has taken the initiative to try to kick-start that process by demanding several resolutions to re-start the negotiations at European level.
In November last year there was a positive development in the Bundesrat when it endorsed an efficiency roadmap calling on European member states to reduce their net ‘land take’ [the amount of Greenfield land they develop] to zero by 2050.
That call was subsequently backed up and brought forward to 2030 by the German Lӓnder [states].
By asking for that to happen, by implication brownfield sites would have to play a major role in the development of any new business activities.
What is your strategy for trying to push the soil framework directive?
As a party, we want to highlight that to stop soil deterioration has a positive economic impact. Some people think developing brownfield land is a costly business and that it is cheaper to use virgin land. The European Environmental Bureau and Deutscher Naturschutzring [the German League for Nature Conservation and Environmental Protection) did a recent study which found that soil deterioration costs Europe €38 billion. The cost of not developing brownfield sites should also be taken into account.
Europe is undergoing a serious financial crisis, are you not concerned that in these circumstances policymakers and the public will think that sustainable industrial growth is an unaffordable luxury?
Part of the answer is very simple, whenever you have a period of economic uncertainty, investors will take a fourth or fifth look before deciding on any investment. That is why it is so important that governments and regulators come up with a very quick framework for industrial policy that they are willing to stick to in the longer term to give investors the basis for rational calculations in the medium and long term.
I am not saying it’s possible to develop a strategy without problems but if we do not start to orientate ourselves now, then the cost of turning around the cart that is sliding ever deeper into the mud will increase as we go on.