Europe seeks a comprehensive strategy to lift its competitiveness 

A file photograph dated 21 October 2003 showing the Bayer AG chemical and pharamcutical factory Leverkusen, north west Germany. [EPA/Oliver Berg]

The dominance of US firms and Chinese companies in the digital world has sounded the alarm bells in Europe. EU and national officials have agreed that the competitiveness of European firms requires a comprehensive strategy that goes beyond easing the bloc’s competition rules.

The anxiety about our economic future is only increasing as China is paving the way for its economic superiority through unfair practices and massive subsidies.

Against this background, the EU is still struggling to come up with the right strategy to face a highly challenging environment.

The EU’s largest economies, Germany and France, have proposed watering down competition rules and the European Commission’s authority, in order to facilitate the surge of European champions.

But EU officials, national envoys and business representatives put the focus on other areas in a debate hosted by EURACTIV on 8 October.

“There isn’t one single tool for the challenges we face,” said Janne Känkänen, director for EU and international affairs at the Finnish ministry of economic affairs and employment.

Paul Csiszár, director at the directorate-general for competition (European Commission), noted that some politicians feel tempted to squeeze competition at home to make European firms more competitive abroad.

But he warned that “competition enforcement is not the silver bullet for all the problems” Europe faces, including the growing competition from US and Chinese titans.

Europe looks for its ‘formula’ to create industrial champions

As Europe prepares for a comprehensive update of its competition, industrial and trade policies, experts and private sector representatives have warned against state interventionism proposed by France and Germany.

“We won’t go too far if we relax the competition rules”, he added. Instead, he called for the completion of the single market as it offers great opportunities for European companies.

What is needed is a “comprehensive approach” that factors in the climate angle in the industrial transformation, said Lucie Studničná, president of the consultative commission on industrial change at the European Economic and Social Committee. 

Liam Bates, executive vice-president at Outokumpu, a global stainless steel manufacturer, argued that Europe needs to lead globally in sustainability while progressing on digitisation “must be another keyword for us.”

The call from Paris and Berlin to limit the Commission’s competences followed the EU executive’s decision to block Alstom-Siemens merger.

Csiszár said that both companies were already European champions as train makers, and the operation did not want to increase their competitiveness but their balance sheet. 

Känkänen shared the goal of having “European champions”, but added that the EU competition rules “served us well”.

CEOs reject watering down Commission’s antitrust powers

A group of European multinational chiefs proposed a modernization of the EU’s competition rules to face the rivalry of US and China’s companies in the digital age, but rejected France and Germany’s proposal to interfere in European Commission’s exclusive powers.

Instead, he said that the rules should be stepped up in some fields, for example, in order to better regulate the growing influence of platform firms, fuelled by the consumer data they hold.

But Europe should not exclusively rely on big firms to create European champions as middle-sized companies are also leading in their respective sectors.

In Studnicna’s view, there should be a strategy to achieve a “good, smart combination” of big and middle-sized firms.

The future of Europe’s competitiveness is increasingly dependent not only on internal policies such as the industrial policy under review or the internal market; but also on external tools, including Europe’s trade competences and the impact of its regulatory powers beyond its borders.

German ambassador to the EU: 'China is changing us'

Europe should increase its economic assertiveness abroad and put forward a new strategy to face China’s rivalry, as the challenges posed by Beijing are already affecting the way European countries are preparing to compete with global powers, experts and diplomats agreed on Thursday (12 July).

Europe’s stricter standards on health, environment or consumer protection could be spread through the trade deals the bloc signs. The EU also proved its influence as a rule maker with its data privacy rules, which inspired similar legislation across the world.

Känkänen highlighted that the regulatory role the EU plays could represent a “competitive advantage” for the continent.

Csiszár noted that there could be a “trade-off” between maintaining our social market economy and competitiveness. But he concluded that the ‘European way of life’, including our social structure and public policies that reduce inequality, distinguishes us from the rest of the world.

“It is something we can be proud of and it attracts people,” he added. 

Six takeaways from Siemens-Alstom rejection

The European Commission decided on Wednesday (6 February) to block the merger of Siemens and Alstom, meant to create a European champion in the railway sector, due to the negative impact it would have on the European market and consumers.

[Edited by Zoran Radosavljevic]

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