A new industrial strategy

In “A Europe Fit for the Digital Age”

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In its 2020 Work Programme, under the priority 'A Europe fit for the digital age', the Commission announced its intention to launch a comprehensive long-term strategy for Europe’s industrial future. On 10 March 2020, the Commission adopted an ‘Industry Package’, including the new Industrial Strategy itself, as well as an Small and Medium-Sized Enterprises (SMEs) Strategy for a sustainable and digital Europe, a report identifying and addressing barriers to the Single Market, and a long-term action plan for better implementation and enforcement of single market rules.

The Industrial Strategy focuses on three priorities: supporting European industry's global competitiveness, making Europe climate-neutral by 2050 and shaping Europe's digital future. The Strategy proposes a set of policy measures supporting the transformation of European industry, under the following headings:

  • A deeper and more digital single market: putting forward an Intellectual Property Action Plan (published in November 2020) to support technological sovereignty in Europe, and make the legal framework suitable for the green and digital transitions, and reviewing EU competition rules, with the aim of ensuring that they are fit for purpose.
  • Upholding a global level playing field: adopting a White Paper to address distortive effects caused by foreign subsidies in the single market (in June 2020), an action plan on the Customs Union (in September 2020) to reinforce controls, and a legislative proposal for an EU Single Window to allow for fully digital clearance processes at the border (in October 2020).
  • Supporting industry towards climate neutrality: putting forward a ‘Renovation Wave’ initiative (in October 2020), a comprehensive strategy for sustainable and smart mobility (in December 2020) or a Carbon Border Adjustment Mechanism to reduce the risk of carbon leakage.
  • Building a more circular economy: presenting a proposal for a new Regulation on batteries and waste batteries (in December 2020) or a sustainable product policy framework.
  • Embedding a spirit of industrial innovation: launching new European Partnerships under Horizon Europe (such as ‘Innovative Health Initiative’ or ‘Smart Networks and Services’ in February 2021)
  • Skilling and reskilling: launching a European Pact on skills (in November 2020)
  • Investing and financing the transition: reviewing State aid rules for Important Projects of Common European Interest (IPCEIs) or presenting renewed sustainable finance strategy.

The strategy also aims to reinforce Europe’s industrial and strategic autonomy (pharmaceuticals strategy adopted in November 2020, action plan on critical raw materials presented in September 2020, or action plan on synergies between civil, defence and space industries, adopted in February 2021). The Strategy also promotes a partnership approach to governance (launch of several industrial alliances, e.g. on low-carbon industries).

In addition to these actions, the Commission will systematically analyse the risks and needs of key European industrial ecosystems. This will be achieved by working closely with an open Industrial Forum consisting of representatives from industry, including SMEs, big companies, social partners, researchers, as well as Member States and EU institutions. The Commission has so far identified 14 ecosystems: aerospace/defence, agri-food, construction, cultural/creative industries, digital, electronics, energy-intensive industries, energy/renewables, health, mobility/transport/automotive, proximity/social economy/civil security, retail, textiles, and tourism.

The Commission Work Program for 2021 envisaged updating the new industrial strategy to take into account the impacts of the COVID-19 pandemic, the evolving global competitive context, and the acceleration of the twin green and digital transitions. The update was put forward by the Commission on 5 May 2021. The Communication particularly points to the need to strengthen the resistance of the Single Market to disruptions and to ensure continuity in the free movement of persons, goods, services, and capital; the need to analyse and address strategic dependencies, and the need to accelerate the green and digital transition. The updated Strategy puts forward a number of additional actions that have to be implemented to tackle these challenges. In particular, a legislative proposal on a Single Market Emergency Instrument is expected by the beginning of 2022, aiming at ensuring the free movement of persons, goods and services in future crises.Furthermore, the Commission will implement a range of actions to reduce and prevent strategic dependencies, for instance the further development of industrial alliances. The proposal for a Regulation on foreign subsidies distorting the internal market, also presented on 5 May, aims to contribute to ensuring the EU’s strategic autonomy by addressing potential distortions on the internal market caused by subsidies granted by foreign governments to undertakings wishing to acquire an EU company or bid in public procurement, Furthermore, transition pathways for industrial ecosystems will be designed in partnership with industry, public authorities, social partners and other stakeholders.

The Communication is accompanied by three reports: the first annual Single Market report, analysing the impact of the Covid-19 pandemic on the Single Market economy (with a focus on the 14 ecosystems) and presenting the state of play of implementation of the March 2020 Industrial Policy package; a report analysing the EU’s current and possible future strategic dependencies and capacities in the areas of products and key technologies, and discussing possible policy measures to address these dependencies; and a report analysing the challenges facing the EU steel industry, pointing to the policies and tools that are already available or in the pipeline to help the sector achieve the twin transitions and improve its resilience.

The legislative proposal on a single market Emergency instrument (mentioned above) is among the key new initiatives of the European Commission for 2022 presented in Ursula von der Leyen and Maroš Šefčovič's letter of intent to European Parliament President David Maria Sassoli and Prime Minister Janez Janša on 15 September 2021 (see dedicated fiche).

This letter also mentions an upcoming "European chips act", aimed at building a state-of-the-art European semi-conductors ecosystem. The proposal was put forward on 8 February (see the dedicated section).

Annex 3 of the annual single market report 2022 published by the Commission on 23 February 2022 is a stocktaking of the implementation of the industrial strategy and its update.

 

References:

Author: Guillaume Ragonnaud, Members' Research Service, legislative-train@europarl.europa.eu

As of 23/06/2022.
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