Paper 15

For a more competitive European industry: “From words to action!”

Europe's major challenges in industrial competitiveness

For decades, Europe's economic policy has been based on consumer protection and free competition, with free access to its market. It has not protected its industries, many of which have disappeared or been relocated, and it has prevented the emergence of leading European industrial and service players.

Several once-prosperous regions have become industrial deserts with high unemployment. The Union now finds itself in a dangerous situation of dependence in strategic and cutting-edge fields, and lacks global leaders able to stand up to the American and Chinese giants.

Europe must react, quickly, and build a more competitive industry!

Recommendations for action to the European Executive

1. As already stressed since 2019 in various Springeurop papers, the EU must urgently simplify its overly complex and slow governance and move to decision-making by qualified majority, under the impetus and authority of the President of the Commission. This will make it possible, in particular, to adopt a plan to relaunch industrial competitiveness in close consultation with European employers.

2. The European Innovation Council (EIC) should be strengthened, with a Board made up mainly of industrialists, assisted by a small number of academics and European officials experienced in innovation. The EIC will drive the relaunch of industrial competitiveness by massively encouraging R&D and the filing of European patents through tax reductions.

3. The competitiveness of European industry having been called into question since the introduction of the US Inflation Reduction Act (IRA), the European Commission must respond:

a) By accelerating the “Green Deal” industrial plan with tax credits;

b) By relaxing state aid rules, reallocating existing funds, so that entrepreneurs (especially SMEs) can receive direct aid without going through bureaucratic procedures;

4. The competitiveness of our industries remains too heavily burdened by energy prices that are higher than in the USA. The EU must choose energy and new technologies as priority markets. More specifically:

a) One part of the recovery plan must be devoted to the challenge of securing energy supply at more competitive prices;

b) Another to the development of the IT/AI, semiconductor, cybernetics and defence industries, where our American and Chinese competitors are leaders.

5. Steer the EU's industrial policy towards ecology and the climate transition in practical areas:

a) Rethink the legislation on compliance obligations for products sold in the EU, making them easily repairable thanks to parts built according to ecological criteria and with optimised technical performance and energy consumption;

b) Encourage R&D and rethink the granting of European patents accordingly;

c) Protect the EU market from the threat of competing products that do not meet its criteria, for example by introducing dissuasive taxes;

6. Put in place measures to defend our strategic interests:

a) Opportunistically strengthen the existing legislative framework on the protection of personal data, as well as the compliance requirements for products imported into the EU (use of manufacturing processes protected by EU patents, etc.);

b) Quickly optimise import duties with an “eye for an eye” approach.

7. The EU must change its competition strategy by changing its approach to mergers in the context of globalisation. It must therefore allow the creation of European giants capable of competing on equal terms with their Chinese and American counterparts in particular.

8. Talent shortages resulting from the decline and ageing of Europe's population inevitably lead to an acceleration of immigration into Europe. The EU must therefore:

a) Strengthen and simplify its migration rules and laws;

b) Put in place more effective integration plans;

c) Promote adequate, continuous training of immigrants for its industrial needs.

9. Finally, Springeurop recommends that the European Commission add without delay to its communication a specific section devoted to the need to promote the entrepreneurial spirit, by regularly publishing success stories of large companies, SMEs, start-ups and also public organisations.

September 2023