S&D Group: „We must strengthen European industry to fight the recession“

EU Commissioner Antonio Tajani is expected to present a paper tomorrow on the renewal of European industrial policy. Commissioner Tajani is set to argue that industry must have a greater say in the European policy process and that the level of industry in the European economy should increase to 20% from the current 15%. Commenting on the forthcoming paper, S&D Group President Hannes Swoboda said: „It is good news that the Commission is now paying more attention to industrial policy alongside its internal market and competition strategies. Our group has been calling for an effective European industrial policy for a long time as a necessary support to national efforts.

„The recent crisis shows that countries with a higher proportion of industry in their economies can manage or recover from crises better. In this context, industry can no longer be the ugly duckling of economic policy but it must be given the same weight as other policies.“

He continued by stressing the role of industrial policy in an increasingly competitive global world:

„In the light of increasing protectionism from the US to China we must strengthen our industry and expand it. However, we must avoid falling into protectionism ourselves. Reciprocity in our trade relations with third partners plays a major role and Europe’s industry will only have a chance on the global markets if we have open markets and fair competition.

„In order to achieve this, we need to focus our efforts on high-quality education and on research and development. However, the extreme austerity policies currently being applied across Europe are leading to cuts in exactly these areas. Furthermore, the financial services sector must in future support the industrial sector more strongly, for example offering less risky packages for speculators.

„In addition, we need to foster an innovative climate and encourage start-ups. Europe is losing a lot of valuable talent because the financing for SMEs is too weak and limited. Banks should be obliged to provide a certain proportion of their assets or their balance accounts as loans and equity capital to these companies; either via risk or innovation funds. This will be crucial to overcome the current credit crunch in several member states. Furthermore, universities should be encouraged to support their graduates in starting new companies.“

He concluded by giving an assessment of the policy context for industry:
„The strengthening of industrial policy also requires more investment in modern infrastructure. This goes from expanding traffic networks to smart grids for power supply and more investment in broadband. Therefore, the Connecting Europe programme in the future EU budget is vital and must not fall victim to the budget cuts.

„Finally, Europe must also be in the lead on regulating industrial processes and products. The REACH regulation on chemicals was a good example of this and the same approach should be applied for sustainable energies.

„The more Europe is ahead on such regulations, the more we can influence global rules. A balanced relationship between our commitment to innovation on the one hand and sustainability and environmental protection on the other hand is crucial.“