Trade

Europes reheated industrial strategy

Europes new industrial strategy wont be a “wow” moment for anyone.

In a bid to hold its own as a global big hitter in the economic showdown with the U.S. and China, the European Commission is set to unveil the latest iteration of its industrial policy to a full fanfare on Tuesday.

But most of it will seem all too familiar.

In fact, Brussels is reheating a heap of left-overs from previous economic plans, and hoping that a generous dollop of political willpower will finally make them a roaring success on the sixth serving.

Tuesdays document will be published alongside a strategy for small and medium-sized enterprises and an action plan on strengthening the blocs single market. It follows a 2005 paper, another in 2010, one in 2012, and two others in 2014 and in 2017.

The last was meant to make EU industry “stronger and more competitive” and “stay or become the world leader in innovation, digitization and decarbonisation,” in then-European Commission President Jean-Claude Junckers own words.

Fast-forward three years and it is his successor Ursula von der Leyen who is trying to pull off the same trick by mapping out a three-pronged vision that is meant to make Europe digital, green and globally competitive.

Plans ranging from trade defense to greater leeway for subsidies are far from new in themselves. What has changed, however, is the level of political will that major countries such as France and Germany are now willing to invest in an industrial strategy, which was long dismissed as an outmoded idea that did not gel with free market economies. Europe now feels cornered and increasingly irrelevant faced with the erratic behavior of U.S. President Donald Trump in the trade war with Beijing and the rise of China Inc.

“We have to define a new industrial way for Europe in this rapidly changing world,” von der Leyen told businesspeople last week.

Mixed expectations

There are hopes that things will be different this time.

Markus Beyrer, director general of BusinessEurope, Europes business lobby, noted Internal Market Commissioner Thierry Breton and two of the Commissions executive vice presidents, Valdis Dombrovskis and Margrethe Vestager were all putting an emphasis on the new plan.

“So I think theres a good chance that there is more than we have seen in the past,” he said.

Peter Sweatman, chief executive of Climate Strategy & Partners, a strategic consultancy firm, also sensed greater momentum and said the Commission was sending a clear message that “this is the territory that were going to own and if youre going to develop decarbonization technologies, 5G etc, Europes the place we want you to do it.”

Yet the schemes to be announced are not novel.

Trade defense measures such as an instrument to address reciprocity over big public tenders and a carbon border adjustment mechanism are both ideas we have seen before.

On digital, one of the Commissions top priorities, the industrial strategy merely lists already-known initiatives. Drafts list the data strategy, which was presented by the Commission mid-February, the evaluation and review of EU competition rules for the digital age and the Digital Services Act, a future legal framework that will set rules on how platforms such as Google and Facebook police illegal content online. Cybersecurity and AI have been identified as an area of “strategic importance.”

On how the industrial strategy will incorporate the Green Deal, the Commissions other top priority, expectations are low.

There will be a focus on so-called Important Projects of Common European Interest — so-called strategic value chains which will get Brussels blessing for public support — including hydrogen, low-carbon industries and batteries. But the strategy pRead More – Source