This time Europe means business.
Thats the message from draft EU plans setting out a last-ditch effort to keep Europe in the economic fast lane with the likes of China and the United States in the years ahead.
The plans, seen by POLITICO, come in preparation for a landmark industrial strategy expected in March. They show the European Commission intends to repackage a farrago of topics, ranging from skills to sustainable buildings, as a new strategic agenda designed to give a shot in the arm to European industries.
At first glance, in areas ranging from trade defense against China to repairing failings in the single market, the “comprehensive industrial strategy” is set to rewarm past policy initiatives that have fallen flat.
The big difference this time is political will.
Berlin and Paris have signaled they are willing to throw muscle behind the strategy, and want to tear up the EUs once sacrosanct competition rule book to allow the creation of more European champions. Without the free-trading British in opposition, France will also have greater leeway to press through rules that will bar Asian companies from big EU public tenders in sectors ranging from trains to motorways.
The idea of blocking Asian companies from EU tenders is also a long-running saga that reappears in the latest draft plans.
Perhaps most significantly, and in a confirmation that the powers of the EUs once-mighty competition enforcers are being relegated in the face of domestic industrial ambition, there will be far more room to channel public subsidies into priority sectors such as green vehicles, hydrogen, health, the Internet of Things and microelectronics, according to the draft plans.
Seeking to allay fears that all this state largesse could mean the advent of Fortress Europe, the draft strategy document reads: “Our vision is not about shielding uncompetitive industries or encouraging protectionist policies.”
While the Commission hails its plans as a “new and assertive industrial policy that will enable the EU to remain a global economic power,” many of the topics are all-too-familiar.
Old friends
Pledges to boost the single market are nothing new. The previous Commission also repeatedly vowed to forge a more effective single market in digital and services but never managed to resolve the many hurdles, such as geoblocking or companies carving the Continent into national markets where they can command widely divergent prices.
Indeed, in Europes all-important food sector, the last Commission presided over a period where the domestic “gastronationalist” interests of France and Italy consistently trumped concerns about the single market.
The idea of blocking Asian companies from EU tenders is also a long-running saga that reappears in the latest draft plans. The French are demanding trade reciprocity — saying Japanese companies should not be allowed to bid in Europe if an engineering giant such as Alstom cannot win deals in Japan — but the idea was always blocked by Britain, which argued such protectionism would drive up prices for consumers.
The new plans confidently predict that this so-called International Procurement Instrument is on its way and “will allow the EU to gain leverage in negotiations to open third country procurement markets.”
“The EU cannot be complacent about third counties or companies undermining fair competition in the single market or on global markets,” the draft says. “This includes using trade defence instruments robustly.”
As far as changes to competition law are concerned, the document leaves unresolved the core questions of how far Paris and Berlin are willing to go to change competition rules.
Both France and Germany called for new rules after the Commission last year blocked a mega-merger in the rail sector between Alstom and Siemens. While Paris and Berlin said the deal was required to challenge the Chinese rail industry, Brussels retorted the tie-up would simply harm consumers.
To change or not to change the rules
The document concedes the EU is willing to “review” its rules but it is unclear what this means. French politicians have celebrated this review, which they see as a response to Alstom-Siemens, but Competition Commissioner Margrethe Vestager has been categorical that the review is not a response to the train merger, which she torpedoed.
The draft also pledges work on a foreign subsidies instrument. The main point of interest to many competition and trade lawyers is whether this will flip the burden of proof — and put theRead More – Source
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