Brussels, 24 May 2024
The Council, on the initiative of the Belgian presidency, has adopted conclusions on ‘A competitive European industry driving our green, digital and resilient future’. Boosting the competitiveness of European industry should be high on the political agenda of the next European Commission and these conclusions provide the way forward towards a new European competitiveness deal. The conclusions analyse the situation of the EU’s industrial sector, explore ways to improve innovation, access to finance and the business environment for manufacturers, and propose the main principles underlying a future EU industrial policy.
The Union’s ambitious goals for digital leadership and climate neutrality offer important opportunities for building industrial leadership and creating high-quality jobs. With the start of the next mandate of the European Commission ahead of us, now is the time to lay the building blocks for a European industrial policy and to provide guidance on the way forward towards a new European competitiveness deal.
Jo Brouns, Flemish Minister for Economy, Innovation, Work, Social Economy and Agriculture
The EU: home to a competitive industry
The Council conclusions adopted today provide a framework for future industrial policy. Amid significant technological, economic and geopolitical shifts, Europe needs a competitive industry with a strong manufacturing base in order to boost innovation, productivity, quality jobs, sustainability and growth. However, EU industry has been confronted with many challenges, including rising global competition and consecutive crises (e.g., COVID-19, the Russian war of aggression against Ukraine, tensions in the Red Sea, etc.), which have strained supply chains and driven up energy prices. The document adopted today underlines the importance of the green and digital transition, which has created both opportunities and challenges for companies and citizens. The conclusions recommend giving priority to areas of technology that are critical for the EU’s economic security.
Innovation and competitiveness
The Council conclusions consider innovation to be the driving force of European competitiveness. In that connection, the conclusions call for the identification of a limited number of strategic priorities in the EU’s industrial research and innovation policy. A key task for the next Commission will be to try to bridge the ‘innovation paradox’ (i.e. the fact that knowledge does not always translate to marketable products and services).
Financing and industrial policy
Finance is also considered, and is an essential building block of the EU’s industrial policy. Therefore, the conclusions explore how to boost private and public finance instruments, while preserving the competition and state aid policies. In order to improve financing, among other things, the conclusions call for the advancement of the Capital Market Union and the use of existing instruments such as the European Investment Bank, the cohesion policy, important projects of common interest (IPCEIs) and the InvestEU programme. In addition, existing European funding mechanisms should be evaluated and, if necessary, improved, structural ways to increase private investment should be explored, and, finally, the Commission is called upon by the Council to assess whether the financing toolbox for industry is effective in reaching the Union’s common goals in a timely manner.
Improving the business environment
The Council conclusions underline the need to establish the right framework conditions for industry to succeed. This includes a well-functioning single market; a clear regulatory framework that facilitates investment while protecting competition; an energy market that provides sustainable, secure and affordable energy; a well-trained and highly skilled workforce; an open and ambitious trade policy; quality standards; and the protection of intellectual property and the valorisation of knowledge.
Joint future action
Finally, the conclusions call for a comprehensive European industrial policy which is in line with the green and digital priorities of the Union. Europe’s future industrial policy framework should be based on evidence-based tools, metrics, market-based principles and core economic forecasts and findings. It should also integrate the latest economic results in an industrial policy analysis, and incorporate environmental, sustainability, resilience and social factors into its baseline models, which identify potential strategic future growth markets. The EU’s future industrial policy should build on the existing 2020 EU industrial strategy and its update, the 2021 green deal industrial plan and the digital decade, and should also take into consideration recent legislation such as the chips act, the critical raw materials act and the net-zero industry act.
Background
The European Council, in its conclusions of 17 and 18 April 2024, underlined the European Union’s commitment to ensuring its long-term competitiveness, prosperity and leadership on the global stage and to strengthening its strategic sovereignty. An important part of that objective should be achieved with the development of an effective industrial policy.
- Council conclusions
- Council calls for a comprehensive long-term industrial policy strategy with a vision for 2030 (press release, 27 May 2019)
- EU industrial policy (background information)