Commission updates EU Industrial Strategy by lessons learnt from Covid-19

It is considering preparation of an Alliance on Space Launchers and on Zero Emission Aviation

Photo: EU Valdis Dombrovskis (L-R), Margrethe Vestager and Thierry Breton.

To prop up Europe's industry in leading the twin transition towards climate neutrality and digital leadership and to take into account all the complexities posed by the coronavirus, the Commission updated the EU Industrial Strategy set out in March 2020, and published prior to the announcement by the WHO of Covid-19 pandemic.

The EU executive suggests new measures to strengthen the resilience of the Single Market, especially in times of crisis and one of them is a ‘emergency instrument’ to help react more quickly in the event of future crises.

It will offer solutions to facilitate circulation of persons, goods and services, and improve transparency on intra-EU export and services restrictions. It will also lead to faster product availability and enhance market surveillance. That can be done through standards setting and sharing or strengthened public procurement co-operation.

The Services Directive will be fully enforced to ensure that Member States comply with their existing obligations, including the notification obligation in order to identify and eliminate new potential barriers.

Market surveillance of products will be strengthened and significant investment to support SMEs will be mobilized. Through an Alternative Dispute Resolution schemes will be addressed payments delays to SMEs and provided measures to address solvency risks affecting small businesses.

Presenting the new proposals to the press, Executive Vice-President Margrethe Vestager commented that updated Industrial Strategy is about “making sure our industries are equipped to drive the digital and green transformations of our economy while ensuring the competitiveness of our industries, also in the context of the recovery from the coronavirus crisis”.

This requires new investments now – in people, in technologies and in the right regulatory framework that guarantees fairness and efficiency, she said adding that “By supporting and extending the scope of key tools already at our disposal, we are today presenting our lessons learnt and reaffirming our commitment to work together with all economic actors from across Europe”.

Resilient global supply chains are essential in times of crisis as they help absorb shocks and speed up recovery, Executive Vice-President Valdis Dombrovskis, stated.

“As we emerge from the Covid-19 pandemic, our updated Industrial Strategy aims to leverage Europe's position as a global industrial leader in order to provide a competitive edge in digital and green technologies. We will seek cooperation with likeminded partners wherever we can to support open, fair and rules-based trade; reduce strategic dependencies; and develop future standards and regulations: all of which are critical for our economic strength. At the same time, we stand ready to act autonomously whenever we must to defend ourselves against unfair practices and protect the integrity of the Single Market,” EVP Dombrovskis explained.

According to Internal Market Commissioner Thierry Breton, the real industrial revolution is starting now “provided we make the right investments in key technologies and set the right framework conditions”. Europe is giving itself the means for an innovative, clean, resilient industry which provides quality jobs and allows its SMEs to thrive even during the recovery process, he noted.

To address strategic technological and industrial dependencies, triggered due to the pandemic, the Commission carried out a 'bottom-up' analysis based on trade data. Out of 5,200 products imported in the EU, an initial analysis identifies 137 products, representing 6% of the value of the EU's total import value of goods, in sensitive ecosystems for which the EU is highly dependent. This is the case mainly in the energy intensive industries such as raw materials, and health ecosystems, such as pharmaceutical ingredients, as well as concerning other products relevant to support the green and digital transformations.

Another 34 products, representing 0.6% of the EU's total import value of goods, are potentially more vulnerable given their possibly low potential for further diversification and substitution with EU production. The analysis also shows challenges and dependencies in the area of advanced technologies. A monitoring system will be developed through the Commission's Observatory of Critical Technologies. Works towards diversifying international supply chains and pursuing international partnerships to increase preparedness, continues.

The EU executive is preparing the launch of the Alliance on processors and semiconductor technologies and the Alliance for Industrial Data, Edge and Cloud. It is also considering the preparation of an Alliance on Space Launchers and on Zero Emission Aviation.

For accelerating the twin transitions are proposed new measures such as co-creating transition pathways in partnership with industry, public authorities, social partners and other stakeholders, where needed, starting with tourism and energy intensive industries. They could offer a better bottom-up understanding of the scale, cost and conditions of the required action to accompany the twin transitions for the most relevant ecosystems leading to an actionable plan in favour of sustainable competitiveness.

A coherent regulatory framework will be proposed to achieve the objectives of Europe's Digital Decade and the ‘Fit for 55' ambitions, including by accelerating the rollout of renewable energy sources and by ensuring access to abundant, affordable and decarbonised electricity.

SMEs will be provided with ‘sustainability advisors’ and supporting data-driven business models to make the most out of the green and digital transitions. The new measures foresee investments to upskill and reskill in the context of the twin transitions.

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