A4-0138/98

Resolution on the competitiveness of European industry (SEC(96)2121 - C4-0025/97)

The European Parliament,

- having regard to the Commission's staff working paper on 'The competitiveness of European Industry' (SEC(96)2121 - C4-0025/97),

- having regard to the Council Resolution of 21 November 1994 on strengthening the competitiveness of European industry ((OJ C 343, 6.12.1994. p. 1.)),

- having regard to the observations of the parties concerned, particularly at the hearing of 25 September 1997,

- having regard to its previous resolutions on industrial policy in the European Union,

- having regard to the report by the Committee on Economic and Monetary Affairs and Industrial Policy (A4-0138/98),

A. whereas industry is still the basis for the growth and prosperity of Europe; whereas the overwhelming majority of Europe's exports consists of industrial goods; whereas industry is of crucial importance for much of the knowledge-intensive services sector as buyer of its products,

B. whereas industry supplies the service sector with the instruments and methods on which its productivity is based; whereas the competitiveness of enterprises, based on their ability to perform these strategic tasks, is therefore crucial in stimulating growth,

C. whereas this process highlights the mutual dependence between the industrial fabric and the other economic activities and their institutional environment,

D. whereas, therefore, Europe must have a dense industrial fabric, distributed evenly amongst all sectors of industry without neglecting the complementarity between small and medium-sized undertakings, the agents of growth and employment, and large-scale undertakings, the engines of Europe's active participation in the globalization of trade,

E. whereas competitiveness requires, in addition to an inherently well-performing industrial base, overall economic conditions of price and currency stability, together with a tax burden and a system of taxation which do not essentially differ from those in competitor countries, a functioning pay structure and a framework conducive to genuine dialogue between management and labour,

F. whereas European industry represents the mastery of production processes, the vocational skills and experience and the accumulation of scientific and technological knowhow which are essential to an economic bloc of its importance,

G. whereas, however, education systems in Europe need to be modernized, entrepreneurship and management know-how strengthened and advanced research intensified in order to improve on the utilization and development of new technologies,

H. whereas an approach towards strengthening Europe's industrial competitiveness and improving its productivity which is based chiefly on the flexibility of the labour market and cutting the total wage bill is economically and socially inappropriate,

I. whereas the markets in Europe must operate better, which requires more intensive measures to combat the distortion of government aid and monopolies, more exposure to competition with better compliance with public procurement rules and more privatization, and further liberalization and deregulation of markets,

J. whereas the task of adapting industry and, more generally, the European economy to the new technological and economic conditions is a formidable challenge for Europe which concerns society as a whole and makes the responsibility of the political, economic and social leaders all the greater since this phase of social transformation must take place under social conditions which are acceptable and consistent with the European social model,

K. whereas the pace of change is growing ever faster as a result of the development of new technology, new competitor countries and more open markets; whereas, therefore, rules and regulations must be based on principles which are simple and sustainable in the long term in order to produce the necessary flexibility required to succeed in adjusting to new times,

1. Welcomes the publication of a report on the competitiveness of European industry which provides a valuable basis for analysis and a useful tool for assessing the conduct of European industrial policy and hopes that the Commission will regularly publish an evaluation report of this nature on the same analytical basis which will help to monitor trends in the performance of European industry and assess the effectiveness of the measures implemented;

2. Notes that Europe's problems are well charted and that the need now, therefore, is to switch from analysis to action and for the Member States, in particular, to live up to their commitment to enhance competitiveness;

3. Notes the contradictions in the Commission's conclusions which do nonetheless show that despite the criticism with which it so often meets European industry is continuing to perform honourably in its traditionally strong sectors (engineering and metal working, chemistry and pharmaceuticals) even if its performance generally lags behind that of its Japanese and American competitors and even if this trend does not appear to have altered in recent years;

4. Stresses the impact of exchange-rate fluctuations on the competitiveness of European enterprises, whether in Europe in 1992 and 1993 or vis-à-vis the dollar over the past decade, and believes that the adoption of a single currency will therefore have a stabilizing and positive effect;

5. Notes the lack of any real chronic sectoral weaknesses, with the exception of the persistent backwardness in the field of information technology and, to a lesser extent, biotechnology; is nonetheless concerned by the structural failings affecting enterprises as much as the institutional environment, by rigidities of all types and by the difficulties and delays experienced by enterprises and European society in adapting to the technological changes and their repercussions;

6. Points to the very clear correlation between the productivity of the European economy and levels of investment, both public and private, whose weakness over the past decade is plainly one of the major handicaps;

7. Questions, where the level of productivity in Europe is concerned, on the one hand the tax burden borne by enterprises and labour and, on the other hand, the effectiveness of the methods employed by European firms to boost their productivity, whilst noting that, with equal growth rates, the United States are creating more jobs at both high and low value added;

8. Notes that, despite its considerable diversified and complementary research potential, Europe achieves only mediocre results in the area of innovation, although it is essential to its competitiveness, and this is reflected in its decline in the patents sector;

9. Acknowledges the impact of environmental requirements on competitiveness as a factor stimulating research, innovation and improvements in the quality of products but also takes the view that environmental constraints constitute a net financial burden which is only acceptable in production costs if it is imposed on other competitors in the same way and is part of a more comprehensive approach towards sustainable development;

10. Remarks that, apart from the overlapping of economies as a result of the expansion of trade in the internal market, Europe's industrial structures continue to display their own particular national characteristics which only appear to be changing slowly, reflecting Europe's difficulty in evolving towards an organizational model geared to the globalization of markets;

11. Considers that the Commission's analysis fully justifies improving the general underlying conditions in order to strengthen the competitiveness of industry and speed up the necessary structural transformation;

12. Calls on the Commission, accordingly, to draw up proposals laying the foundations for a genuine European industrial policy based, in particular, on incentives for public and private investment, the introduction of aid mechanisms - of the ECSC type - for innovative, job creating and/or restructuring industries, and the development of venture capital;

13. Stresses that a Union industrial policy must lay the emphasis on long-term objectives and contribute towards economic and social cohesion;

14. Considers therefore that it is essential to ensure that a financial environment more favourable to business is created, which will be assisted by the introduction of the euro, in particular by facilitating equity market capitalization, creating a tax structure which is conducive to internal financing and employment, aiding the diversification of sources of finance, particularly for small and medium-sized enterprises, and, finally, by promoting lower ex-post real interest rates;

15. Firmly supports the principle of coordinating and harmonizing fiscal policies, particularly those aspects relating to the various forms of company taxation, in order to prevent any unfair national and/or regional tax competition which would lead, in addition to the relocation of firms, to the depletion of the authorities' tax receipts, to the medium and long-term detriment of economic and social conditions in Europe;

16. Emphasizes the role and responsibility of government at national and European level in financing and part-financing the transport and teleworking papers infrastructures made available to enterprises and repeats, on this occasion, its calls for funds for the trans-European networks, as finance for the teleworking papers infrastructures must be provided to support the necessary adjustment to the new technologies;

17. Considers that the simplification of administration and, more generally, the improvement of every aspect of the administrative environment of enterprises (from business start-ups to taxation, through the application of social legislation and the gathering of statistics) has not been the subject of a sufficiently comprehensive study by the national and European public authorities and suggests that they seek to tailor the role of the administrations more closely to the needs of companies, on the basis of a 'public service mission';

18. Believes that, in the area of R & D, public spending on industrial research must be geared more to commercial applications and its level must be maintained, especially for Community research and for national research policies which must now be properly coordinated between the Member States to enable synergies to take effect in view of the constant increase in the critical mass of research projects;

19. Strongly encourages the creation of European structures, whether private, public or joint in origin (structures of which Eureka is just one of the possible configurations) capable of bringing industrial partners together in major research cooperation projects;

20. Believes the European Union can significantly advance the integration of industry by creating the appropriate legal framework for European groups, with the adoption of the European company statute as a first and psychologically crucial step towards recognizing the European dimension of business;

21. Takes the view that competition policy is an intrinsic component of industrial policy inasmuch as it guarantees all companies the same conditions of development; believes, therefore, that competition policy must be coordinated with research and innovation policy to the extent that it corresponds to an industrial strategy and must be asserted in the European Union's trade policy (as was possible recently in the case of the MacDonnell-Douglas/Boeing merger);

22. Considers that competition policy must encourage the regrouping of European companies in so far as that influences their competitiveness on world markets;

23. Considers that minimum social and environmental conditions should be laid down to govern bilateral and multilateral world trade in order to combat social and environmental dumping; believes, further, that wider and more effective coordination is required when certifying products to be offered for sale on the EU market;

24. Believes that the opening of markets and the globalization of trade makes it necessary to strengthen intellectual property rights for European firms by passing legislation at international level, in the form of economic instruments to promote the competitiveness of enterprises;

25. Considers, furthermore, that the activity of European firms on the large international markets continues, despite the WTO rules, to be bound by numerous direct and indirect restrictions which require more concrete and more energetic action on the part of the Commission, whether by systematically bringing infringement proceedings, extending existing agreements to nations currently excluded (such as China) or limiting the number of bilateral agreements and preferential regimes;

26. Believes that labour markets must be able to adjust in line with the changes in society, and that the initiatives taken on reducing working time in the different Member States must be analysed in terms of their long-term economic and social impact;

27. States its conviction that it is in the skills and continual upgrading of its labour force that Europe can find a lasting remedy for unemployment; education and vocational training must undergo fundamental changes to meet the constant need for new skills which are increasingly drawing the role of education into the business world, a fact which could lead in-service training to be regarded as an integral part of working time and bring it closer to the work place;

28. Hopes that European companies will show more dynamism in adjusting to structural changes with new working methods and a greater ability to take up competitive positions at European and international level;

29. Observes that the changes to the process of industrial organization, arising as much from the pressure of international competition as from the impact of the new technologies, must be taken more fully into account by European firms which must be encouraged to use management tools such as benchmarking or industrial marketing, which is based on a partnership of enterprises upstream and downstream;

30. Stresses the positive contribution that public sector companies make to the industrial competitiveness of the Union and to the attainment of its general objectives;

31. Instructs its President to forward this resolution to the Commission, the Council, UNICE, the Economic and Social Committee and the Committee of the Regions.