Opinion of the Committee of the Regions on the "Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on Industrial Policy in an Enlarged Europe"
Date: 2003-10-09
Institutions: European Committee of the Regions
Subjects: EU industrial policy, European Committee of the Regions, enlargement of the Union, opinion

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Official Journal of the European Union

27.1.2004

Opinion of the Committee of the Regions on the ‘Communication from the Commission to the
Council, the European Parliament, the Economic and Social Committee and the Committee of the
Regions on Industrial Policy in an Enlarged Europe’

(2004/C 23/04)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission to the Council, the European Parliament, the
Economic and Social Committee and the Committee of the Regions on Industrial Policy in an Enlarged
Europe (COM(2002) 714 final);

having regard to the decision of the European Commission of 12 December 2002 to consult it on this
subject, under the first paragraph of Article 265 of the Treaty establishing the European Community;

having regard to the decision of its President of 4 November 2002 to instruct its Commission for
Economic and Social Policy to draw up an opinion on this subject;

having regard to its opinion on An Industrial Competitiveness Policy for the European Union, CdR 140/
95 fin (1);

having regard to its draft opinion (CdR 150/2003 rev.) adopted on 13 June 2003 by the Commission for
Economic and Social Policy (rapporteur: Mr Roberto Pella, President of Biella Provincial Council (I/EPP),

adopted the following opinion unanimously at its 51st plenary session, held on 9 October 2003.

1. Views of the Committee of the Regions

The Committee of the Regions

agrees with the Commission’s precise pinpointing of
1.5.
the numerous connections between industrial policy and other
EU policies that have an impact on industrial competitiveness,
and agrees that these need to be coordinated more effectively;

welcomes

1.1.
the Commission communication and
appreciates the work done, inasmuch as it responds to specific
demands which it itself has expressed in relation to the need
to keep focusing closely at European level on developments in
industrial policy, in order to be able to react promptly to
changes, which in this field are many and sudden;

approves of the approach taken by the Commission,
1.2.
which has developed its own analysis on the basis of the
fundamental principles set out at the Lisbon European Council
in Spring 2000 and later by the Gothenburg European Council
in 2001;

1.6.
notes that poor growth in European productivity and
relatively low employment levels are linked with persisting
structural problems. Tax burdens should also be drastically
reduced, including the levels of corporation tax and labour
taxes;

1.7.
expresses concern regarding the manifestly slow
growth of European industry, particularly as the divergences
between the various areas of the European Union are still too
great;

that

believes,

furthermore,

1.3.
the principle expressed
at the Gothenburg European Council regarding sustainable
development is fundamental with a view to the balanced
parallel development of the three factors of industrial competi-
tiveness (knowledge, innovation and entrepreneurship);

is directly involved, in its capacity as the body that
1.4.
represents local and regional authorities in Europe,
in all
aspects of industrial policy — not only the predominant
economic side, but also its close links with social, employment,
training and environment policy;

(1) OJ C 100, 2.4.1996, p. 14.

takes the view, nevertheless, that careful analyses such
1.8.
as those presented by the Commission can help to identify the
weak points of industrial policy and spark the necessary
synergistic effects to address them rapidly;

1.9.
feels that, as the communication stresses, the forth-
coming enlargement of the Union is having a very positive
impact, of which there is already evidence, but that it is
important to foresee the inevitable problems, which it will be
possible to address if the applicant countries apply the open
method of coordination in compliance with the appropriate
Treaty procedures;

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expresses its firm intention to play an incisive role in
1.10.
shaping an effective industrial policy, through its constituent
local and regional authority representatives, in the belief that
the administrative decentralisation taking place in many
Member States can help to rally all stakeholders to the policy,
thus providing the conditions for a genuine application of
the open method of coordination in compliance with the
subsidiarity principle and the division of powers as laid down
in the Treaty;

1.11.
urges the Commission to make an analysis of the
systems best suited to improving industrial policy and would
express in particular its appreciation of two later documents,
which were already anticipated in part by the present com-
munication, namely the Green Paper on Entrepreneurship in
Europe (1) and the Communication from the Commission to
the Council and the European Parliament on ‘thinking small
in an enlarging Europe’ (2), as they contain fundamental
observations for an effective industrial policy with a positive
knock-on effect at local level;

picture, to compare the effectiveness of the various solutions
adopted by the Member States and to facilitate the exchange
of good practice; however, it is also necessary to make bottom-
up analyses, working from local level, in order to adopt specific
industrial policies, with reference for instance to particular
products, that can be pinpointed only with the involvement of
the local and regional authorities;

2.3.
feels therefore that the role of the EU is indispensable,
not only in laying down framework conditions and as the
primary observatory for all European policies, but also and
above all as a body that is able to bring States, regions and
local authorities into contact with each other, and that at
European level enables them to pool successful solutions to
the specific problems some of them may have in common;

1.12.
welcomes the way in which the Commission has
made a close connection between improving industrial policy
and improving education and ongoing training systems for
workers;

stresses in particular the need to seek convergence
2.4.
among national policies, with a view to addressing the
chaotic legislative environment that currently causes particular
problems for small and micro businesses (SMEs);

1.13.
believes that in this respect there are a number of
highly effective Community projects under way, and, on this
note, would emphasise once more the effectiveness of the
Galileo project for research and development;

agrees with the Commission that industrial policy has
1.14.
undeniable social implications, and therefore believes that it is
crucial to promote an effective culture of entrepreneurship,
above all through the direct involvement of local and regional
authorities, in view of their close contact with the public.

2.5.
welcomes the proposal for a more systematic EU
approach to improving framework conditions, but is con-
cerned at the slowness with which the Member States are
moving into line with European policy; as the Commission is
right to note, industrial policy must be as adaptable as possible
to continuously and rapidly changing situations and although
the policy will be implemented at European level,
if the
Member States are unable to transpose EU directives promptly,
the growth of European industry will be seriously compro-
mised;

2. Recommendations of the Committee of the Regions

The Committee of the Regions

believes that, of the specific objectives listed by the
2.1.
Commission,
the local and regional authorities must be
involved in particular in the stage of analysing the degree to
which European industrial policy objectives have been met;

2.2.
is of the view that European-level analyses of the
effectiveness of industrial policy are essential to give an overall

(1) COM(2003) 27 final.
(2) COM(2003) 26 final.

stresses the need to strengthen the new approaches in
2.6.
European legislation designed to make it less burdensome for
companies, in particular for small and micro companies, which
are often unfortunately crushed by excessively heavy taxation.
This requirement, essential for the Member States’ small and
micro companies, is all the more important for those in the
applicant countries; a further danger inherent to enlargement
may be the invasion of applicant country markets by major
European groups, which could put
smaller companies,
especially family-run firms, in serious difficulty;

calls on the Commission, therefore, to take care to
2.7.
ensure that mergers and acquisitions, though essential for a
truly competitive European industry on the global market, do
not damage small and micro companies, which are crucial
sources of creativity and innovation;

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urges the Commission to devise strategies for the
2.8.
dissemination of good practice, such as SME groupings, which
are a dynamic part of the European industrial landscape and a
source of innovative ideas; certain European groupings can be
held up as examples, for instance those in the biotechnology
sector, in the industrial areas of Munich and Stockholm and in
north-west Italy’s textiles sector;

2.9.
urges the Commission to keep up its cooperation with
the local and regional authorities, since, as it rightly stresses,
the potential generated by regional policy must be fully
the restructuring process that will
exploited to support
accompany enlargement;

2.10.
stresses that active cooperation with the local and
regional authorities is vital in order to simplify the administrat-
ive procedures faced by companies and thus help small
and micro companies to fulfil their obligations, rather than
continuing to spend funds on dealing with bureaucracy that
could otherwise be used to improve the production process;

urges the Commission to put forward proposals to
2.11.
ensure that useful
facilities set up by local and regional
authorities for companies, such as the one-stop shop for
companies set up in Italy, can be easily exported to other
European countries,
in particular the applicant countries.
These one-stop shops are extremely useful not only for helping
businesses to meet administrative requirements, but also for
informing them about European initiatives;

2.12.
underlines the fact that local and regional authorities
can help to solve the problem of access to European and State
funding for small and micro companies, especially in the light
of EU enlargement;

2.13.
stresses the vital role played by local and regional
authorities in another area of European industrial policy,
namely lifelong learning. The ever-increasing demand from
companies for highly-trained staff should be met with synergic
action from local and regional authorities, universities, training
colleges, research institutes and companies;

points out that as the specific type of training required
2.14.
of workers is often determined locally,
local and regional
authorities — with the assistance of European funding — are
in an ideal position to provide appropriate vocational training
instruments; these instruments are all the more effective if, at
European level, local and regional authorities are given an
opportunity to compare notes with each other and disseminate
good practice. With a view to securing a more effective

industrial policy, with the emphasis on further training for
workers, these issues should be tied in with the local and
regional action plans for employment;

2.15.
agrees with the Commission that research is the
cornerstone of innovation, but recognises that effective infor-
mation is another basic element that is essential with a view to
combining innovative aspects that may appear to be irrelevant
to each other, as was the case for instance in the textiles sector
with the dual concepts of design and IT, which made the
European textiles industry highly competitive on the world
market;

2.16.
agrees that the EU must be made into an ever more
attractive production location, and stresses the need to enhance
communications and the transport sector;

2.17.
urges that Community and national policies recognise
the importance of air freight for supply-chain management.
Equally, e-commerce companies rely on the speed of delivery
of goods as a determinant of success. Such air freight services,
that are reliable, easily accessed and competitive, are of
increasing importance, particularly in peripheral areas;

2.18.
stresses the significant entrepreneurial capacity and
potential of ethnic minorities, while recognising that the
European Commission noted this in its Green Paper on
Entrepreneurship in Europe (1), and calls on the Commission
to explore potential solutions to the difficulties facing this
category of entrepreneur, which, as the Commission’s findings
show, appears to benefit
less than average from public
business-support services and has few contacts with business
organisations; local and regional authorities can play a crucial
role in helping ethnic-minority entrepreneurs to overcome
these difficulties;

2.19.
calls on the Commission to continue the efforts it has
begun at European level to help small and micro companies
set up and sustain business activities;

stresses that

2.20.
local and regional authorities serve
the public and can help to establish a healthy culture of
entrepreneurship, while also providing simple and effective
tools that can enable creative and innovative European citizens
to give serious consideration to setting up their own com-
panies;

(1) COM(2003) 27 final.

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draws attention to a principle mentioned by the
2.21.
Commission in its Green Paper on Entrepreneurship in Europe,
regarding the need to make European society view business
failure in a less categorically intransigent way, so that those
who have taken the risk inherent in any business project and
have failed for reasons other than incompetence or fraud, can
still contribute to the growth of the European economy;

draws the Commission’s attention to its own figures
2.22.
on the crisis in the manufacturing sector, where productivity
growth has been significantly lower than in the USA; stimulat-
ing the manufacturing sector will bolster the EU’s growth
potential. It therefore hopes that a specific directive will soon
be forthcoming to support the manufacturing sector, providing
funding for sectors of production which can significantly
boost EU competitiveness, such as textiles, construction and
other labour-intensive sectors;

2.23.
underlines the need to strengthen the EU’s internal
market and notes in this respect that the Commission has not
paid sufficient attention to this matter; the arrival of the
accession countries may give the internal market a positive
new competitive boost, which would definitely be of great
benefit to European industry at all levels;

2.24.
agrees with the Commission on the need for con-
sumer and public health protection policies as an essential
precondition for consumer confidence and thus internal
market growth;

Brussels, 9 October 2003.

is convinced that an important aspect of EU industrial
2.25.
policy must be the obligation to issue a ‘traceability’ notice
with every product placed on the market giving details of all
production locations and individual producers in the chain,
transparency in
with the aim of addressing the lack of
information; consumers are increasingly aware of their right
and duty in this respect, as it concerns their freedom of choice
and their safety;

calls on the Commission to consider putting forward
2.26.
strategies to prevent European products from suffering the
negative effects of inadequate customs tariffs, which frequently
weaken the competitiveness of European industry;

2.27.
order to provide proper protection for intellectual property;

also underlines the need for a Community patent, in

urges the Commission to continue to pay serious
2.28.
attention to strategies to alleviate the adverse social effects of
the inevitable restructuring that will have the unfortunate
effect of aggravating local and regional authorities’ difficulties
dealing with new areas of social hardship;

2.29.
underlines the need — greater now than in the past
— to secure sustainable development, and recommends taking
direct action to provide the applicant countries with all the
tools they will need to secure it, not least at local level; once
again, there is no concealing the vital role played by local and
regional authorities both in the preparatory phase of shaping
proper cultural awareness and at the stage of devising tools to
promote sustainable development.

The President

of the Committee of the Regions

Albert BORE