# C_2009318EN.01004301.xml

| 23.12.2009 | EN | Official Journal of the European Union | C 318/43 |
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23.12.2009

EN

Official Journal of the European Union

C 318/43

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Opinion of the European Economic and Social Committee on ‘The impact of the global crisis on the main European manufacturing and services sectors’ (Own-initiative opinion)

2009/C 318/09

Rapporteur: Mr PEZZINI

Rapporteur:

Co-rapporteur: Mr GIBELLIERI

Co-rapporteur:

On 26 February 2009 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

‘The impact of the global crisis on the main European manufacturing and services sectors.’

The Consultative Commission on Industrial Change (CCMI), which was responsible for preparing the Committee's work on the subject, adopted its opinion on 10 September 2009. The rapporteur was Mr PEZZINI and the co-rapporteur was Mr GIBELLIERI.

At its 456th plenary session, held on 30 September 2009 and 1 October 2009 (meeting of 1 October 2009), the European Economic and Social Committee adopted the following opinion by 156 votes with two abstentions.

1.   Conclusions and recommendations

Conclusions and recommendations

1.1   The EESC is convinced that the consequences of the current financial crisis on the major European manufacturing and services sectors are such that the EU institutions and Member States must undertake a profound review and closer coordination of EU policies and instruments in order to rebuild their values to prioritise the real economy and the needs of businesses, workers and citizens.

1.2   The EESC strongly advocates ratification of the Lisbon Treaty in order to ensure that the EU's architecture can respond to the need to make our continent's development more competitive, sustainable and open via:

| — | measures to increase cooperation between companies and workers, |
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measures to increase cooperation between companies and workers,

| — | common and better coordinated policies, |
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common and better coordinated policies,

| — | more time-efficient decision-making processes, and |
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more time-efficient decision-making processes, and

| — | simpler and more transparent legislation. |
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simpler and more transparent legislation.

1.3   The EESC is convinced that if the European project is renewed, in the spirit of Jean Monnet at the launch of the Treaty of Paris, which brought the ECSC into existence, it will be possible to rebuild the foundations and launch a European economic recovery. The current treaties have shown worrying limitations in their capacity to face up to the crisis and its economic and social consequences.

1.4   The principle of subsidiarity needs to be understood in its original meaning. Decision-making powers and responsibilities must be allocated to the level where they will be most effective for European citizens. Faced with global problems, policies and instruments have to be of a European and global scale.

1.5   The EESC is convinced that the Member State governments and the Council of the EU must make every possible effort to restore public trust in the quest for a stronger Europe, capable of equipping itself with shared, recognised instruments, and able to cope with the present and future global crises.

| 1.5.1 | The EESC is aware that some countries belonging to the original group who set out to create the European Community are, especially in this period of crisis, displaying considerable impatience with the rules of the internal market in areas such as competition and state aid. This is a mistake (1). |
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1.5.1

The EESC is aware that some countries belonging to the original group who set out to create the European Community are, especially in this period of crisis, displaying considerable impatience with the rules of the internal market in areas such as competition and state aid. This is a mistake (1).

1

| 1.5.2 | In present circumstances, the Council – backed by the European Parliament and the Commission – should devise a ‘strategic pact’, including:






  — | strong commitments to the single market, with reinforced instruments, especially in a number of sectors where shortcomings persist (2); |
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1.5.2

In present circumstances, the Council – backed by the European Parliament and the Commission – should devise a ‘strategic pact’, including:

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strong commitments to the single market, with reinforced instruments, especially in a number of sectors where shortcomings persist (2);

2

| — | an undertaking to introduce fiscal coordination that respects national fiscal sovereignty but boosts cooperation on certain points; |
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an undertaking to introduce fiscal coordination that respects national fiscal sovereignty but boosts cooperation on certain points;

| — | an agreed option for Member States that are ‘feeling the crunch’ to join the eurozone rapidly, and in compliance with certain conditions; |
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an agreed option for Member States that are ‘feeling the crunch’ to join the eurozone rapidly, and in compliance with certain conditions;

| — | implementation of proportionate, transparent and gradually scaled-down coordinated public measures to reduce systemic risks, and a swift return to a self-sustaining level of activity on the free market. |
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implementation of proportionate, transparent and gradually scaled-down coordinated public measures to reduce systemic risks, and a swift return to a self-sustaining level of activity on the free market.

1.6   The EESC's message is that citizens, the social partners and civil society as a whole are convinced that the current crisis provides a spur to work for a stronger Europe that can rise above the limited role of individual countries.

1.7   Individual countries must be asked to make practical sacrifices, in terms of their representation and visibility, in order to strengthen Europe's role in the world as expressed democratically: the EP, Council and Commission.

1.8   The EESC is convinced that the first instrument to be put in place should be a real substantial industrial policy that is not influenced by the choices of financial speculators and aims at sustainable development. Fifty years of concrete experience in industrial policy based on the ECSC Treaty in two key European production sectors should be consulted, updated as necessary, amended to foster a sustainable development, and used as a reference for future action (3).

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1.9   It is through the development of businesses and the social economy, and their ability to provide innovative responses, that Europe will overcome the crisis and recover economically.

1.10   In order to create a development strategy, the social partners and organised civil society as a whole should work towards developing Territorial Social Responsibility (TSR) with a view to implementing a coordinated set of strategies, including:

| — | a resilience and survival strategy making it possible to operate in mature markets through better specialisation in the same market, with cost cutting, or strong diversification into contiguous sectors, or new formulas; |
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a resilience and survival strategy making it possible to operate in mature markets through better specialisation in the same market, with cost cutting, or strong diversification into contiguous sectors, or new formulas;

a resilience and survival strategy

| — | a product and service process innovation strategy including market and technology change, with new materials leading to new products; |
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a product and service process innovation strategy including market and technology change, with new materials leading to new products;

a product and service process innovation strategy

| — | new initiatives involving the development of new types of businesses, sectors or initiatives. Foresight evaluations are required to envisage new expanding products (such as lead markets), towards which new investment should be channelled; |
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new initiatives involving the development of new types of businesses, sectors or initiatives. Foresight evaluations are required to envisage new expanding products (such as lead markets), towards which new investment should be channelled;

new initiatives

required

| — | local marketing that emphasises excellence through agreements with research centres in order to increase technological cross-pollination; |
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local marketing that emphasises excellence through agreements with research centres in order to increase technological cross-pollination;

local marketing

| — | financial support through development funds, including through loan guarantees under the EIF (4); |
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financial support through development funds, including through loan guarantees under the EIF (4);

financial support

4

| — | capitalisation of the risk capital of credit unions through agreements between administrations and the banking system to allow payment deferrals for micro and small businesses, primarily in order to safeguard employment levels; |
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capitalisation of the risk capital of credit unions through agreements between administrations and the banking system to allow payment deferrals for micro and small businesses, primarily in order to safeguard employment levels;

capitalisation of the risk capital of credit unions

| — | short-term debt consolidation to enable micro and small businesses to focus on production, marketing and after-sales services; |
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short-term debt consolidation to enable micro and small businesses to focus on production, marketing and after-sales services;

short-term debt consolidation

| — | support for an innovative services sector (green economy) by taking advantage of innovative training opportunities under the European Social Fund; |
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support for an innovative services sector (green economy) by taking advantage of innovative training opportunities under the European Social Fund;

support for an innovative services sector (green economy)

| — | development of high-standard personal services in part by enhancing and strengthening the social and health care system (5); |
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development of high-standard personal services in part by enhancing and strengthening the social and health care system (5);

development of high-standard personal services

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| — | implementation of infrastructure policies contributing to increased innovative choices for a low-carbon economy and creation of conditions making it advantageous to live in the region; |
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implementation of infrastructure policies contributing to increased innovative choices for a low-carbon economy and creation of conditions making it advantageous to live in the region;

implementation of infrastructure policies

| — | stepping up energy efficiency and environmental criteria in public procurement procedures; |
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stepping up energy efficiency and environmental criteria in public procurement procedures;

stepping up energy efficiency

public procurement

| — | encouraging new, more efficient products to substitute old ones, by means of funding; |
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encouraging new, more efficient products to substitute old ones, by means of funding;

encouraging new, more efficient products

| — | enhanced access to information; |
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enhanced access to information;

enhanced access to information

| — | easier use of raw materials. |
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easier use of raw materials.

easier use of raw materials

1.11   A comparison of the national stimulus packages in the industrialised economies reveals the need for greater shared foresight on the part of European governments, especially with respect to stimulating sustainable development and corporate social responsibility, not to mention closer coordination with the European Commission. Moreover, rhetoric is not enough. Member States must urgently implement their plans as the crisis is hitting businesses and workers hard.

1.12   The EESC takes a positive view of the efforts made at the Prague Employment Summit held on 7 May 2009 in identifying areas for action to be implemented at national and European levels together with the social partners, on the basis of a strengthened social dialogue (6), in order to ensure that greater consideration is given to job creation and the necessary measures to boost demand.

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1.13   The Lisbon Strategy must retain its credibility and demonstrate its ability to adapt to this new context by stepping up reform and identifying clear priorities and new methods, and streamlining with the objectives of the EU Sustainable Development Strategy in the post-Lisbon strategy to be defined in the coming months.

1.14   European governments must make greater efforts to ensure that that the commitments entered into at Community level are discharged in full and in accordance with the agreed timetables.

1.15   State aid to support employment in businesses affected by globalisation and the credit crisis should be based on assurances that:

| — | such aid does not have the effect of strengthening protectionism or hampering free competition; |
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such aid does not have the effect of strengthening protectionism or hampering free competition;

| — | businesses in receipt of funds should, above all, undertake to sustain employment levels; |
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businesses in receipt of funds should, above all, undertake to sustain employment levels;

| — | collective agreements should be respected and the workers’ purchasing power maintained; |
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collective agreements should be respected and the workers’ purchasing power maintained;

| — | workers can use periods of reduced production to train for new qualifications and should be supported in this; |
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workers can use periods of reduced production to train for new qualifications and should be supported in this;

| — | public financial support does not become a source of income for shareholders through dividends or other forms of share buy-backs; |
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public financial support does not become a source of income for shareholders through dividends or other forms of share buy-backs;

| — | as far as possible, support promotes the development of new environment-friendly products and services; |
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as far as possible, support promotes the development of new environment-friendly products and services;

| — | aid must not interfere with competition and must be temporary and degressive; |
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aid must not interfere with competition and must be temporary and degressive;

| — | suitable monitoring mechanisms are in place to protect tax-payers. |
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suitable monitoring mechanisms are in place to protect tax-payers.

1.16   The proposals so far adopted as a social response to the crisis have been inadequate. Insufficient consideration has been given to job creation and the necessary measures to boost demand (e.g. more coordinated fiscal stimulus packages at the EU level and matters of wage policy) (7).

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1.17   With regard to the rules, in the case of temporary labour market measures, it must be ensured that short-term employment is combined with appropriate training, especially in the fields of health and safety at work, and guaranteed pay levels.

1.18   The Committee believes that it is urgent and vital for the future survival of the EU's production structure, to implement policies to re-orientate young people towards technological and scientific subjects at all educational and training levels, in order to avoid values associated with production being destroyed and replaced with financial and speculative values (8).

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1.19   In order to facilitate a recovery in production and the sustainability of Europe's industrial and services sectors, the EESC considers it necessary to step up research, development and innovation activities by means of available instruments, such as the 7th RTD Framework Programme and the European Institute of Technology (EIT), but also by introducing a clear sectoral approach based on priorities identified by the European Technological Platforms.

1.20   The EESC strongly advocates a Community initiative to support the business services sector, developing innovative services and content of benefit to citizens, consumers, workers and companies, especially with respect to the internationalisation and exports of SMEs.

1.21   The Committee believes that, as pointed out by the EESC president (9), there is a need to reconsider the criteria for applying the Structural Funds and the ESF in particular, with a view to allowing direct access, at EU level, as well as on a sectoral basis, and, hence, in line with ECSC experience, which proved effective and rapidly applicable.

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1.22   With regard to international trade, the EESC considers it a priority to expedite the conclusion of the Doha Round multilateral trade negotiations, which would send out a positive message to international markets and have important repercussions on the ongoing crisis (10): the EU can and must assume a stronger leadership role in the negotiations, speaking with one voice in order to achieve ambitious results that ensure compliance with ILO core labour standards and the decent work concept, that are essential to secure the future growth of European manufacturing and service sectors.

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1.23   There is a very real prospect of a dangerous downward protectionist spiral in present circumstances. This requires the Commission to vigorously enforce EU trade defence laws, taking firm action against dumped and subsidised products, to challenge and act against unjustified protectionist measures, and to intensify dialogue with the EU's main trading partners in order to resolve trade disputes.

2.   Background

Background

| 2.1 | The manufacturing and services sectors are the backbone of Europe's economy. The establishment of the Single Market has led to their strong development based on common standards and rules. |
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2.1

The manufacturing and services sectors are the backbone of Europe's economy. The establishment of the Single Market has led to their strong development based on common standards and rules.

| 2.2 | The manufacturing and services sectors are faced with exceptional challenges:






  — | financial collapse, which has affected the entire global economy and undermined the credibility and reliability of markets with unparalleled force and synchronicity; |
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2.2

The manufacturing and services sectors are faced with exceptional challenges:

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financial collapse, which has affected the entire global economy and undermined the credibility and reliability of markets with unparalleled force and synchronicity;

financial collapse

| — | the new international division of labour, with the necessary industrial rationalisation and restructuring entailed by the new global market, which the newly industrialised continents have fully penetrated, while being bound by fewer constraints; |
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the new international division of labour, with the necessary industrial rationalisation and restructuring entailed by the new global market, which the newly industrialised continents have fully penetrated, while being bound by fewer constraints;

the new international division of labour

| — | climate change and the environment, with the paramount objective, in the interests of public welfare, of ensuring the protection of the ecosystem and sustainable development, which necessitate improved energy efficiency, modernised production cycles, and new products and processes based on clean technologies; |
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climate change and the environment, with the paramount objective, in the interests of public welfare, of ensuring the protection of the ecosystem and sustainable development, which necessitate improved energy efficiency, modernised production cycles, and new products and processes based on clean technologies;

climate change and the environment

| — | human capital, demographic ageing and strong migration flows, which require greater professional mobility and flexibility, lifelong learning and higher qualification levels in order to ensure improved quality of life and better jobs; |
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human capital, demographic ageing and strong migration flows, which require greater professional mobility and flexibility, lifelong learning and higher qualification levels in order to ensure improved quality of life and better jobs;

human capital, demographic ageing and strong migration flows

| — | shortcomings in governance at the international and European level, with the inadequacies of institutions, decision-making capacity and rules, as demonstrated by the current international monetary system and the crisis facing the European project; |
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shortcomings in governance at the international and European level, with the inadequacies of institutions, decision-making capacity and rules, as demonstrated by the current international monetary system and the crisis facing the European project;

shortcomings in governance

| — | regional disparities, which are becoming more accentuated within the EU; |
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regional disparities, which are becoming more accentuated within the EU;

| — | the contraction of available public and corporate budget resources, which may not be sufficient to cover the reforms required for economic and labour market recovery. |
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the contraction of available public and corporate budget resources, which may not be sufficient to cover the reforms required for economic and labour market recovery.

the contraction of available public and corporate budget resources

| 2.3 | The current global recession may require these sectors to make even greater efforts to:






  — | adapt to the new international division of labour; |
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2.3

The current global recession may require these sectors to make even greater efforts to:

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adapt to the new international division of labour;

| — | protect the ecosystem and ensure sustainable development; |
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protect the ecosystem and ensure sustainable development;

| — | reposition themselves towards new product and process technologies; |
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reposition themselves towards new product and process technologies;

| — | create and improve jobs through continuous skills improvement and professional development. |
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create and improve jobs through continuous skills improvement and professional development.

| 2.4 | The ongoing crises do not only challenge the survival of businesses, they also offer major development and innovation opportunities. Businesses should not however be left to cope on their own. Entrepreneurship and job creation should be encouraged by implementing reforms as soon as possible in order to improve the business environment by reducing unnecessary administrative burdens, preserving and improving the internal market, encouraging risk capital, stimulating innovation and flexicurity measures, legislating less and better, and investing in the links between academia and science and the world of business, and in educating and training human resources, especially in the technical and scientific disciplines and in the development of lead markets. |
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2.4

The ongoing crises do not only challenge the survival of businesses, they also offer major development and innovation opportunities. Businesses should not however be left to cope on their own. Entrepreneurship and job creation should be encouraged by implementing reforms as soon as possible in order to improve the business environment by reducing unnecessary administrative burdens, preserving and improving the internal market, encouraging risk capital, stimulating innovation and flexicurity measures, legislating less and better, and investing in the links between academia and science and the world of business, and in educating and training human resources, especially in the technical and scientific disciplines and in the development of lead markets.

| 2.5 | The EESC underlines the importance of focusing on the current situation and possible future prospects for the key manufacturing and services sectors, and tourism in particular, bearing in mind a number of fundamental and interrelated aspects:






  — | international dimension: the crisis developed in integrated international circuits that were able to use innovative instruments far beyond the control of the regulatory and supervisory instruments of individual markets and the international market as a whole; and it comes on top of Europe's efforts to adjust to a global reference framework that will see the BRIC countries (11) reaching and possibly exceeding 30 % of global GDP by 2020; |
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2.5

The EESC underlines the importance of focusing on the current situation and possible future prospects for the key manufacturing and services sectors, and tourism in particular, bearing in mind a number of fundamental and interrelated aspects:

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international dimension: the crisis developed in integrated international circuits that were able to use innovative instruments far beyond the control of the regulatory and supervisory instruments of individual markets and the international market as a whole; and it comes on top of Europe's efforts to adjust to a global reference framework that will see the BRIC countries (11) reaching and possibly exceeding 30 % of global GDP by 2020;

international dimension

11

| — | institutional dimension: statutory national, regional and international governance mechanisms proved entirely incapable of identifying problems in advance, defining measures and instruments in good time to prevent contagion spreading from one regional or national economy to another, or developing antibodies to limit the damage; |
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institutional dimension: statutory national, regional and international governance mechanisms proved entirely incapable of identifying problems in advance, defining measures and instruments in good time to prevent contagion spreading from one regional or national economy to another, or developing antibodies to limit the damage;

institutional dimension

| — | social dimension: in March 2009 unemployment in the euro area went up to 8.9 % (7.2 % in March 2008) and 8.3 % in EU27 (6.7 % in March 2008), while under-25 unemployment was 18.1 % in the euro area and 18.3 % in EU27 (12); |
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social dimension: in March 2009 unemployment in the euro area went up to 8.9 % (7.2 % in March 2008) and 8.3 % in EU27 (6.7 % in March 2008), while under-25 unemployment was 18.1 % in the euro area and 18.3 % in EU27 (12);

social dimension

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| — | ‘real economy’ dimension: in EU27, industrial production in December 2008 was down by 12.8 % compared with the same month in 2007; construction was down by 6.7 %; and intra-Community trade was down by 13.7 % and EU exports of manufactured products were down by 5.8 % (13). Production downturns primarily affected the chemicals, textiles, automotive and basic metal sectors, with exports contracting dramatically in the automotive, chemicals, telecommunications and radio-TV sectors, and, in the case of services, tourism (14); |
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‘real economy’ dimension: in EU27, industrial production in December 2008 was down by 12.8 % compared with the same month in 2007; construction was down by 6.7 %; and intra-Community trade was down by 13.7 % and EU exports of manufactured products were down by 5.8 % (13). Production downturns primarily affected the chemicals, textiles, automotive and basic metal sectors, with exports contracting dramatically in the automotive, chemicals, telecommunications and radio-TV sectors, and, in the case of services, tourism (14);

‘real economy’ dimension

13

14

| — | environmental dimension: energy efficiency, combating climate change and the sustainable use of resources are urgent challenges for the protection and development of the planet and, especially for Europe, public health, the protection of the ecosystem and the overall economy, with major implications for competitiveness, in particular within a clear, stable and harmonised regulatory framework. |
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environmental dimension: energy efficiency, combating climate change and the sustainable use of resources are urgent challenges for the protection and development of the planet and, especially for Europe, public health, the protection of the ecosystem and the overall economy, with major implications for competitiveness, in particular within a clear, stable and harmonised regulatory framework.

environmental dimension

3.   International dimension

International dimension

| 3.1 | In the USA, GDP contracted by 1 % during the fourth quarter of 2008, following a drop of 0.1 % in the previous quarter. In Japan, GDP went down by 3.3 %, following a drop of 0.6 % in the previous quarter. GDP in the euro area fell by 1.5 %, following a drop of 0.2 % in the previous quarter (15). |
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3.1

In the USA, GDP contracted by 1 % during the fourth quarter of 2008, following a drop of 0.1 % in the previous quarter. In Japan, GDP went down by 3.3 %, following a drop of 0.6 % in the previous quarter. GDP in the euro area fell by 1.5 %, following a drop of 0.2 % in the previous quarter (15).

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| 3.2 | The unemployment rate is rising rapidly and looks set to approach 12 % by the end of 2010 according to the OECD. At the same time, salaries are rising more slowly or not all. |
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3.2

The unemployment rate is rising rapidly and looks set to approach 12 % by the end of 2010 according to the OECD. At the same time, salaries are rising more slowly or not all.

| 3.3 | As the Commission points out (16): ‘As long as lending remains scarce, efforts to boost demand and consumer confidence will be held back. (....) This is a global crisis, and recovery will not be complete until the major players of the world economy are once again growing and trading together’. |
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3.3

As the Commission points out (16): ‘As long as lending remains scarce, efforts to boost demand and consumer confidence will be held back. (....) This is a global crisis, and recovery will not be complete until the major players of the world economy are once again growing and trading together’.

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| 3.4 | The European Trade Union Confederation (ETUC) shares this view, stating that ‘the outlook for growth in 2009 and beyond is alarming, given that the situation will get worse before it may get better, and it will only get better if there is a fundamental shift in thinking: away from the comforting yet unrealistic notion of a return to “business as usual” towards a new economic reality investing in people, innovation and sustainable development, as well as a revalorisation of the role of government:






  — | in regulating markets, |
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3.4

The European Trade Union Confederation (ETUC) shares this view, stating that ‘the outlook for growth in 2009 and beyond is alarming, given that the situation will get worse before it may get better, and it will only get better if there is a fundamental shift in thinking: away from the comforting yet unrealistic notion of a return to “business as usual” towards a new economic reality investing in people, innovation and sustainable development, as well as a revalorisation of the role of government:

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in regulating markets,

| — | providing public services, and |
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providing public services, and

| — | and fighting wage and income inequalities’ (17). |
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and fighting wage and income inequalities’ (17).

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| 3.5 | In the run-up to the G20 summit in London of 18 March 2009, the Confederation of European Business (BUSINESSEUROPE) stressed that ‘the financial crisis is having a devastating impact on companies as the major drivers of growth have been hit by limits on access to finance. (....) Economic stimulus is needed to prevent a global economic meltdown’ (18). |
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3.5

In the run-up to the G20 summit in London of 18 March 2009, the Confederation of European Business (BUSINESSEUROPE) stressed that ‘the financial crisis is having a devastating impact on companies as the major drivers of growth have been hit by limits on access to finance. (....) Economic stimulus is needed to prevent a global economic meltdown’ (18).

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4.   Institutional dimension

Institutional dimension

| 4.1 | Broader consensus is developing and there is a growing convergence of forces to take extraordinary measures and identify emergency policy responses for the preservation, at all costs, of businesses, manufacturing sectors, production and service activities, jobs, incomes and household consumption, going beyond existing rules. |
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4.1

Broader consensus is developing and there is a growing convergence of forces to take extraordinary measures and identify emergency policy responses for the preservation, at all costs, of businesses, manufacturing sectors, production and service activities, jobs, incomes and household consumption, going beyond existing rules.

| 4.2 | Policies aimed at limiting the economic, employment and social impacts of the crisis by offloading internally accumulated tensions onto neighbouring countries are not only a false solution to the problem, they risk pushing economies into nationalistic and protectionist behaviour that would destroy international cooperation and regional integration frameworks painstakingly built up over recent years in Europe and around the world. |
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4.2

Policies aimed at limiting the economic, employment and social impacts of the crisis by offloading internally accumulated tensions onto neighbouring countries are not only a false solution to the problem, they risk pushing economies into nationalistic and protectionist behaviour that would destroy international cooperation and regional integration frameworks painstakingly built up over recent years in Europe and around the world.

| 4.3 | The EESC considers the following points to be fundamental, indispensable components of any action taken to tackle the ongoing crisis:






  — | setting up a new international and global cooperation framework based on transparent rules for the preventive elimination of pathologies, even if latent, in the economic, monetary, and international financial system, while entirely preserving free international trade; |
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4.3

The EESC considers the following points to be fundamental, indispensable components of any action taken to tackle the ongoing crisis:

—

setting up a new international and global cooperation framework based on transparent rules for the preventive elimination of pathologies, even if latent, in the economic, monetary, and international financial system, while entirely preserving free international trade;

setting up

| — | studying, without delay, options for a new social contract with the financial sector and a strong re-regulation and better oversight of the international financial market, not to mention better public control over stimulus packages to ensure that financial support reaches employees, consumers and businesses, and also safeguards international free trade; |
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studying, without delay, options for a new social contract with the financial sector and a strong re-regulation and better oversight of the international financial market, not to mention better public control over stimulus packages to ensure that financial support reaches employees, consumers and businesses, and also safeguards international free trade;

studying

| — | preserving the foundations of the EU, in terms of:






  — | a single European market; |
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preserving the foundations of the EU, in terms of:

preserving

—

a single European market;

| — | free movement of people, goods, capital and services; |
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free movement of people, goods, capital and services;

| — | development and full application of common policies and especially competition policy; |
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development and full application of common policies and especially competition policy;

| — | entrepreneurial freedom and the protection of the European social model; |
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entrepreneurial freedom and the protection of the European social model;

| — | implementing proportionate, transparent and gradually scaled-down coordinated public measures to reduce systemic risks; |
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implementing proportionate, transparent and gradually scaled-down coordinated public measures to reduce systemic risks;

implementing

| — | safeguarding and improving the competitiveness and scale of Europe's manufacturing and services sectors; |
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safeguarding and improving the competitiveness and scale of Europe's manufacturing and services sectors;

safeguarding

| — | boosting the knowledge-based economy; |
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boosting the knowledge-based economy;

boosting

| — | enhancing workforce and managerial skills; |
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enhancing workforce and managerial skills;

enhancing

| — | upgrading products and processes, aimed at environmental protection, energy efficiency and a more efficient use of materials, and establishing framework conditions for introducing them into the market; |
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upgrading products and processes, aimed at environmental protection, energy efficiency and a more efficient use of materials, and establishing framework conditions for introducing them into the market;

upgrading

| — | supporting the development of Territorial Social Responsibility (TSR); |
| --- | --- |

—

supporting the development of Territorial Social Responsibility (TSR);

supporting

| — | preventing an increased administrative and regulatory burden for European businesses; |
| --- | --- |

—

preventing an increased administrative and regulatory burden for European businesses;

preventing

| — | developing a coordinated IPR (19) approach; |
| --- | --- |

—

developing a coordinated IPR (19) approach;

developing

19

| — | improving access to credit, especially for SMEs. |
| --- | --- |

—

improving access to credit, especially for SMEs.

improving access to credit, especially for SMEs

| 4.4 | The EESC is convinced that the ongoing crisis should result in an institutional leap towards greater economic integration, geared to the development of a quality economy, and to more and better jobs. |
| --- | --- |

4.4

The EESC is convinced that the ongoing crisis should result in an institutional leap towards greater economic integration, geared to the development of a quality economy, and to more and better jobs.

| 4.5 | The EESC nevertheless believes that a qualitative leap towards greater EU political integration is even more necessary. It considers this to be the only way to achieve a trade-off between giving up national egoism and priorities in pursuance of a common future. |
| --- | --- |

4.5

The EESC nevertheless believes that a qualitative leap towards greater EU political integration is even more necessary. It considers this to be the only way to achieve a trade-off between giving up national egoism and priorities in pursuance of a common future.

| 4.6 | The EESC is convinced that only if the European project is renewed, in the spirit of Jean Monnet at the launch of the Treaty of Paris, which brought the ECSC into existence, will it be possible to rebuild the foundations and launch a European economic recovery. |
| --- | --- |

4.6

The EESC is convinced that only if the European project is renewed, in the spirit of Jean Monnet at the launch of the Treaty of Paris, which brought the ECSC into existence, will it be possible to rebuild the foundations and launch a European economic recovery.

| 4.7 | We must lose no time in completing the ratification of the Lisbon Treaty in order to ensure an EU architecture that can respond via better coordinated policies. |
| --- | --- |

4.7

We must lose no time in completing the ratification of the Lisbon Treaty in order to ensure an EU architecture that can respond via better coordinated policies.

5.   Social dimension of the crisis: the impact on workers, companies and households

Social dimension of the crisis: the impact on workers, companies and households

| 5.1 | In recent months, corporate restructuring has increased dramatically. Many companies have launched redundancy schemes, with significant social consequences, also for the futures of young people (20). Others have declared bankruptcy. |
| --- | --- |

5.1

In recent months, corporate restructuring has increased dramatically. Many companies have launched redundancy schemes, with significant social consequences, also for the futures of young people (20). Others have declared bankruptcy.

20

| 5.2 | The EESC firmly believes that human resources are the key to a return to EU competitiveness in terms of both workforce skills and qualifications, and a new managerial governance model. |
| --- | --- |

5.2

The EESC firmly believes that human resources are the key to a return to EU competitiveness in terms of both workforce skills and qualifications, and a new managerial governance model.

| 5.3 | The EESCC believes that investing in the workforce and protecting jobs are vital for the promotion of European industrial competitiveness in terms of both qualifications, new skills for the workforce and a new model for corporate social responsibility (21). |
| --- | --- |

5.3

The EESCC believes that investing in the workforce and protecting jobs are vital for the promotion of European industrial competitiveness in terms of both qualifications, new skills for the workforce and a new model for corporate social responsibility (21).

21

| 5.4 | Given the magnitude of the crisis, vocational training/employment schemes orientated towards growth sectors, such as renewable energies, should be set up without delay for workers who fall victim to the recession. |
| --- | --- |

5.4

Given the magnitude of the crisis, vocational training/employment schemes orientated towards growth sectors, such as renewable energies, should be set up without delay for workers who fall victim to the recession.

| 5.5 | Measures to support household consumption should be considered, also in order to stimulate demand (22). |
| --- | --- |

5.5

Measures to support household consumption should be considered, also in order to stimulate demand (22).

22

6.   Real economy dimension: relaunching the manufacturing and services sectors

Real economy dimension: relaunching the manufacturing and services sectors

| 6.1 | Deindustrialisation: In recent years, especially at the turn of the century, the Commission and many Member States may have given scant importance to industrial and manufacturing policy in order to prioritise wealth derived from developing complex financial systems, supported mainly by North American models. |
| --- | --- |

6.1

Deindustrialisation: In recent years, especially at the turn of the century, the Commission and many Member States may have given scant importance to industrial and manufacturing policy in order to prioritise wealth derived from developing complex financial systems, supported mainly by North American models.

Deindustrialisation

| 6.2 | In 2005 the EU adopted an outline integrated European industrial policy based on a mix of sectoral and horizontal measures, followed by a mid-term review in 2007, making a contribution to the EU's growth and jobs strategy (23). Subsequently, in 2008 the EU launched a sustainable industrial policy action plan (24), on which the EESC has already commented (25). |
| --- | --- |

6.2

In 2005 the EU adopted an outline integrated European industrial policy based on a mix of sectoral and horizontal measures, followed by a mid-term review in 2007, making a contribution to the EU's growth and jobs strategy (23). Subsequently, in 2008 the EU launched a sustainable industrial policy action plan (24), on which the EESC has already commented (25).

23

24

25

| 6.3 | The central importance of socially responsible and competitive businesses, social economy enterprises and a better qualified and participatory workforce must constitute the reference base for recovery policies for the manufacturing and services sectors. |
| --- | --- |

6.3

The central importance of socially responsible and competitive businesses, social economy enterprises and a better qualified and participatory workforce must constitute the reference base for recovery policies for the manufacturing and services sectors.

| 6.4 | The Lisbon Strategy must retain its credibility. The Member States and the EU institutions must demonstrate their ability to adapt policies to the new context by identifying clear priorities and new methods for the post-Lisbon strategy to be defined in the coming months. Reforms should be accelerated by identifying clear specific priorities, with feasible and verifiable roadmaps. |
| --- | --- |

6.4

The Lisbon Strategy must retain its credibility. The Member States and the EU institutions must demonstrate their ability to adapt policies to the new context by identifying clear priorities and new methods for the post-Lisbon strategy to be defined in the coming months. Reforms should be accelerated by identifying clear specific priorities, with feasible and verifiable roadmaps.

| 6.5 | In the EESC's view, the manufacturing and services sectors in Europe should be developed by upgrading processes and products. The EESC calls on the EU to take firm action in this regard. |
| --- | --- |

6.5

In the EESC's view, the manufacturing and services sectors in Europe should be developed by upgrading processes and products. The EESC calls on the EU to take firm action in this regard.

| 6.6 | The EESC believes that such an industrial strategy should include:






  — | major investments in new buildings and in making existing buildings sustainable, especially in the case of public and industrial buildings (26), using materials with low transmission factors such as glass-compound systems and ceramics, in order to reduce consumption; |
| --- | --- | --- |

6.6

The EESC believes that such an industrial strategy should include:

—

major investments in new buildings and in making existing buildings sustainable, especially in the case of public and industrial buildings (26), using materials with low transmission factors such as glass-compound systems and ceramics, in order to reduce consumption;

major investments in new buildings and in making existing buildings sustainable,

26

| — | major investments to support energy efficiency, to increase renewable energy production capacity and develop CO2 capture and storage technologies; |
| --- | --- |

—

major investments to support energy efficiency, to increase renewable energy production capacity and develop CO2 capture and storage technologies;

major investments to support energy efficiency,

2

| — | investment in low-impact transport schemes, with more localised production and better waste management, such as the Commission's proposed European Green Car Initiative (27); |
| --- | --- |

—

investment in low-impact transport schemes, with more localised production and better waste management, such as the Commission's proposed European Green Car Initiative (27);

investment in low-impact transport schemes,

27

| — | greater access by the manufacturing sector to investment funds supported by the government in order to facilitate innovation and develop clean technologies and processes in the automotive and the mechanical engineering sectors to complement and reinforce the Commission's proposed Factories of the Future Initiative (28); and |
| --- | --- |

—

greater access by the manufacturing sector to investment funds supported by the government in order to facilitate innovation and develop clean technologies and processes in the automotive and the mechanical engineering sectors to complement and reinforce the Commission's proposed Factories of the Future Initiative (28); and

greater access by the manufacturing sector to investment funds

28

| — | an EU-level boost for hard and soft network infrastructure, especially to disseminate broadband information technologies, also by strengthening the EU i2010 Initiative; this is smart investment and infrastructure with a view to furthering the integration of an enlarged EU. |
| --- | --- |

—

an EU-level boost for hard and soft network infrastructure, especially to disseminate broadband information technologies, also by strengthening the EU i2010 Initiative; this is smart investment and infrastructure with a view to furthering the integration of an enlarged EU.

an EU-level boost for hard and soft network infrastructure,

| 6.7 | The specific situation facing SMEs has to be addressed, especially with respect to lack of access to credit and loans. At present, funds dedicated to SMEs are not fulfilling their purpose. |
| --- | --- |

6.7

The specific situation facing SMEs has to be addressed, especially with respect to lack of access to credit and loans. At present, funds dedicated to SMEs are not fulfilling their purpose.

| 6.8 | The Small Business Act, on which the Committee issued an opinion (29), ‘falls short of what is required, particularly in these difficult economic and financial times’, as it is not adequately funded. It is however important to ensure full, timely and systematic application of the Act in the Member States. |
| --- | --- |

6.8

The Small Business Act, on which the Committee issued an opinion (29), ‘falls short of what is required, particularly in these difficult economic and financial times’, as it is not adequately funded. It is however important to ensure full, timely and systematic application of the Act in the Member States.

29

| 6.9 | As the Committee has frequently emphasised that, in addition to providing access to credit, it is particularly important under present circumstances to:






  — | adopt the Statute for a European private company, a matter of urgency for SMEs (30), while respecting workers’ rights; |
| --- | --- | --- |

6.9

As the Committee has frequently emphasised that, in addition to providing access to credit, it is particularly important under present circumstances to:

—

adopt the Statute for a European private company, a matter of urgency for SMEs (30), while respecting workers’ rights;

30

| — | review the Community directive on late payment; |
| --- | --- |

—

review the Community directive on late payment;

| — | promote the role of industrial clusters as drivers for local development by setting up EU-level ‘functional production clusters’, which are particularly useful in the manufacturing and services sectors; |
| --- | --- |

—

promote the role of industrial clusters as drivers for local development by setting up EU-level ‘functional production clusters’, which are particularly useful in the manufacturing and services sectors;

| — | launch Community mentoring initiatives for new SMEs and start-ups, to boost their chances of success and their access to international markets; and |
| --- | --- |

—

launch Community mentoring initiatives for new SMEs and start-ups, to boost their chances of success and their access to international markets; and

| — | constantly scrutinise sectoral vulnerability, so as to head off sector ‘market failures’, and develop a positive, forward-looking vision of development. |
| --- | --- |

—

constantly scrutinise sectoral vulnerability, so as to head off sector ‘market failures’, and develop a positive, forward-looking vision of development.

| 6.10 | With regard to specific sectors, following a wide-reaching public consultation, the Commission had earlier identified a series of manufacturing sectors where stimulus and revitalisation action should be concentrated. Six markets were identified for the initial stage of the lead market initiative (31):






  — | eHealth, |
| --- | --- | --- |

6.10

With regard to specific sectors, following a wide-reaching public consultation, the Commission had earlier identified a series of manufacturing sectors where stimulus and revitalisation action should be concentrated. Six markets were identified for the initial stage of the lead market initiative (31):

31

—

eHealth,

| — | protective textiles, |
| --- | --- |

—

protective textiles,

| — | sustainable construction, |
| --- | --- |

—

sustainable construction,

| — | recycling, |
| --- | --- |

—

recycling,

| — | bio-based products, and |
| --- | --- |

—

bio-based products, and

| — | renewable energies. |
| --- | --- |

—

renewable energies.

| 6.11 | The method used by the Commission should be applied to other sectors. This means identifying the areas where concerted action through key policy instruments and framework conditions, as well as reinforced cooperation between key stakeholders, could speed up market development without interfering with competitive forces (32). The same could be said for the development of the European defence industry, which should be covered by a more coordinated European policy following the establishment of the European Defence Agency and the progress made in terms of joint security (33). |
| --- | --- |

6.11

The method used by the Commission should be applied to other sectors. This means identifying the areas where concerted action through key policy instruments and framework conditions, as well as reinforced cooperation between key stakeholders, could speed up market development without interfering with competitive forces (32). The same could be said for the development of the European defence industry, which should be covered by a more coordinated European policy following the establishment of the European Defence Agency and the progress made in terms of joint security (33).

32

33

| 6.12 | In order to make European industrial policy effective, we need to take into account the specific context of individual sectors, including the automotive sector (cars, trucks and motorcycles (34), the chemicals sector, shipbuilding, coal and steel, construction, glass and ceramics, cements, textiles and clothing, the agrifood sector, mechanical engineering, the electromechanical sector, aerospace, IT, telecommunications, energy, and health services. |
| --- | --- |

6.12

In order to make European industrial policy effective, we need to take into account the specific context of individual sectors, including the automotive sector (cars, trucks and motorcycles (34), the chemicals sector, shipbuilding, coal and steel, construction, glass and ceramics, cements, textiles and clothing, the agrifood sector, mechanical engineering, the electromechanical sector, aerospace, IT, telecommunications, energy, and health services.

34

| 6.13 | The EESC also considers that in order to support the introduction of innovations, it is essential to further develop newly created industrial policy instruments such as the Joint Technology Initiatives, innovative public procurement, and the action plan for sustainable production and consumption. |
| --- | --- |

6.13

The EESC also considers that in order to support the introduction of innovations, it is essential to further develop newly created industrial policy instruments such as the Joint Technology Initiatives, innovative public procurement, and the action plan for sustainable production and consumption.

| 6.14 | The EESC also believes that the liberalisation of the services sector should be stepped up, especially with regard to the services of the liberal professions and persistent tariff and numerus clausus restrictions. |
| --- | --- |

6.14

The EESC also believes that the liberalisation of the services sector should be stepped up, especially with regard to the services of the liberal professions and persistent tariff and numerus clausus restrictions.

numerus clausus

| 6.15 | The EESC strongly advocates a Community initiative to support the business services sector, developing innovative services and content of benefit to citizens, consumers, workers and companies, speeding up the shift to digital services and the widespread introduction of broadband, and removing barriers to e-government and systems interoperability. |
| --- | --- |

6.15

The EESC strongly advocates a Community initiative to support the business services sector, developing innovative services and content of benefit to citizens, consumers, workers and companies, speeding up the shift to digital services and the widespread introduction of broadband, and removing barriers to e-government and systems interoperability.

| 6.16 | The EESC believes that the common foreign policy should be strengthened and made more stringent vis-à-vis relations with the rest of the world. |
| --- | --- |

6.16

The EESC believes that the common foreign policy should be strengthened and made more stringent vis-à-vis relations with the rest of the world.

7.   Sustainable development dimension

Sustainable development dimension

| 7.1 | The EESC has supported (35) and continues to support initiatives to develop sustainable extraction, production and consumption policies, fully integrated with other EU policies, in order to turn potential challenges into competitive opportunities. |
| --- | --- |

7.1

The EESC has supported (35) and continues to support initiatives to develop sustainable extraction, production and consumption policies, fully integrated with other EU policies, in order to turn potential challenges into competitive opportunities.

35

| 7.2 | The EESC is convinced that EU action should continue to set ambitious targets, supported, however, by legislative and financial instruments that do not undermine Europe's competitiveness by placing greater burdens on businesses and citizens but support positive practices and processes for innovation and technological improvement. |
| --- | --- |

7.2

The EESC is convinced that EU action should continue to set ambitious targets, supported, however, by legislative and financial instruments that do not undermine Europe's competitiveness by placing greater burdens on businesses and citizens but support positive practices and processes for innovation and technological improvement.

| 7.3 | The EESC reiterates the importance of launching appropriate initiatives to assume international leadership in energy efficiency, extending renewable energy production capacity and developing CO2 capture technologies. |
| --- | --- |

7.3

The EESC reiterates the importance of launching appropriate initiatives to assume international leadership in energy efficiency, extending renewable energy production capacity and developing CO2 capture technologies.

2

Brussels, 1 October 2009.

The President of the European Economic and Social Committee

Mario SEPI

---

(1)  Mario Monti, former Commissioner for competition, has voiced his concern about the survival of the European model, which is based on the internal market (editorial in Corriere della Sera, 10 May 2009).

1

Corriere della Sera

(2)  Recognition of qualifications; capital gains tax; and consolidation of pension contributions resulting from employment in different countries, etc.

2

(3)  Cf. The European Manufuture Platform (www.www.manufuture.org) and the interview with Étienne Davignon on the application of the Davignon Plan (Brussels, 14.1.2008; www.ena.lu).

3

(4)  The European Investment Fund (EIF), financed by the European Investment Bank (EIB). Cf. first pillar of the Competitiveness and Innovation Framework Programme (CIP).

4

(5)  Cf. Lead market ‘e-Health’ (COM(2007) 860) – and point 6.10 below.

5

e-Health

(6)  Cf. EESC Opinion on the Results of the Employment Summit (CESE 1037/2009), not yet published in the OJ.

6

(7)  Cf. Proposals adopted at the Luxembourg European Council of November 1997 to reduce VAT on certain labour services defined by the Member States, in a European Framework.

7

(8)  ‘Aim at achieving that all EU countries should send at least 50 % of students through tertiary education and to attract at least 25 % of tertiary education students into technical, engineering and science education’ (Electra report).

8

(9)  Letter from the EESC President, Mr Sepi, to the Commission President, Mr Barroso, in connection with the Prague EU Social Summit.

9

(10)  See opinion ‘New trade agreements negotiations - The EESC position’, OJ C 211, 19.8.2008, p. 82–89 and the opinion on ‘The external dimension of the renewed Lisbon strategy’ (not yet published in the OJ).

10

(11)  BRIC: Brazil, Russia, India and China.

11

(12)  Eurostat STAT, 30.4.2009.

12

(13)  SEC(2009) 353.

13

(14)  UNWTO World Tourism Barometer, Vol. 7 No. 2 – June 2009.

14

(15)  During the first quarter of 2009 there was a 2.5 % drop with respect to the previous quarter. In May 2009, EU industrial production fell by 15.9 % with respect to the previous year (16.8 % in the manufacturing sector) – Cf. SEC 2009/1088 – 20.7.2009.

15

(16)  COM(2009) 114.

16

(17)  Summary of ETUC resolution on a European Recovery Programme (5.12.2008; http://www.etuc.org/).

17

(18)  BUSINESSEUROPE, 17.3.2009, in the run-up to the G20 business event (18.3.2009; http://www.businesseurope.eu/).

18

(19)  IPR = International Product Regulations.

19

(20)  In EU-27 the youth unemployment rate reached 18.3 % during the first quarter of 2009, corresponding to 5 million unemployed young people – EUROSTAT 23.7.2009.

20

(21)  It will be made all the more difficult by the effect on SMEs of the link between risk capital funds and loans set out in Basel II. Measures should be launched at EU level to see how these effects could be mitigated.

21

(22)  Cf. Consumer confidence indicator (table 6), ‘Business & Consumer Survey Results’, DG ECFIN, June 2009.

22

(23)  COM(2007) 374.

23

(24)  COM(2008) 397.

24

(25)  See the opinion on ‘Sustainable Consumption and Production’, OJ C 218, 11.9.2009, p. 46–49.

25

(26)  Joint Employment Report 2008/2009, EPSCO Council, 9.3.2009.

26

(27)  See COM(2008) 800 final, A European Economic Recovery Plan.

27

(28)  Ibidem.

28

(29)  See EESC opinion published in OJ C 182, 14.8.2009, p. 30.

29

(30)  Cf. EESC Opinion on a European Company Statute for SMEs (OJ C 125, 27.5.2002).

30

(31)  COM(2007) 860 final.

31

(32)  Competitiveness Council. 4.12.2006: Conclusions on innovation policy and competitiveness.

32

(33)  Cf. Opinions on ‘Transfers of defence-related products’ and on ‘European Defence’ (published in OJ C 100, 30.4.2009, p. 109 and OJ C 10, 14.1.2004, p. 1), respectively.

33

(34)  The EU motorcycle sector, in particular, should have access to support and incentive schemes set up by Member States, similar to those used for the automobile sector, since it is also suffering the consequences of the ongoing economic crisis.

34

(35)  EESC opinion on Eco-friendly production (OJ C 224, 30.8.2008, p. 1).

35

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