A stronger and self-reliant European industry through new inputs, innovation

A part of an offshore derrick is lifted in the 'Liebherr' crane factory in Rostock, Germany, 19 January 2009. The decline of the German engineering industry continues. According to the German society for engineering and plant manufacturing VDMA, the industry had 35 per cent less orders in March 2009 than last year. [EPA/BERND WUESTNECK]

Participants at a virtual conference called “Re-starting the EU economy – How can industry contribute to a resilient and sustainable industry?” agreed on one point: the key is to  keep the market open, but with new inputs.

“Open market is what we need the most”, Carl Martin Welcker, president of the mechanical engineering industry association (VDMA) in Germany, told the event, organised by EURACTIV on 7 July. 

He insisted that this must not be “only during the pandemic but also in the future. Open market is the key to our success”.

Reinhilde Veugelers, a senior research fellow and professor of economics, said another key was trust, because “citizens need to trust the market”.

This, she said, must result in a good mix of regional, national and global policies, not only inside the single market but also through policies. “Keeping the global system as open as possible, it is our best defence”, she said.

An opportunity to make a difference

Indeed, many countries were tempted by protectionism during the lockdown and still are.

Kamil Kilijanski, chief economist at the European Commission’s DG Grow, which is responsible for the internal market and industry, said there was “no silver bullet” for external trade.

To him, the solution lies in “making sure we act collectively and have logical bargaining power.” And this bargaining power is innovation.

MEP Tom Berendsen, who is the shadow rapporteur of “A new long-term strategy for Europe’s industrial future” at the European Parliament, warned that Europe should not be ‘too naive”. This suggests that “our supply-chain is all over the world, guaranteeing a level-playing field, protecting companies but also keeping an eye on the world”. 

VDMA’s Welcker approved this sovereignist vision. “We have plans all over the world, we have investments abroad. We are so paranoid that somebody is killing our industry, that we are doing it ourselves.”

They all agreed on having a stronger and self-reliant Europe, but also on changing its infrastructure to make it more sustainable, more digital and resilient. Kilijanski said Europe “is looking for a recovery through ecosystems and transforming our economies into green, digital and resilient in a transparent way.”

For Reinhilde Veugelers, “resilience means to be more flexible, no protectionism, but using more coherent instruments and a mixture of a top-down and bottom-up strategy.”

MEP Berendsen asserted the importance of taking all sectors into account to make them sustainable.

”We need all these technologies to make it possible and affordable, with biomass, nuclear, gas. Inspiring other countries in the world to join us is if we do it in a way that the industry grows, getting ready for the future, in an affordable and realistic way”, he said.

Kilijanski called for a partnership through the recovery plan, including dialogue with the Commission, and “not conditionality in a strict troika sense”. That is why Carl Martin Welcker asked for the “money to be spent neutrally”.

“Market has to drive sustainability, market forces should not be replaced by political forces,” he said. He took CO2 reduction as an example, which is much better organised, with a CO2 price and the creation of a market of CO2 to make polluters pay. He also called  for less bureaucracy, saying “creativity is the key, not bureaucracy.”

All the panellists saw the pandemic an opportunity to implement a real change in our system.

“Don’t waste this chance,” Kilijanski concluded.

[Edited by Zoran Radosavljevic]

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