Debate: Revised industrial strategy for Europe
Date: TUESDAY, 18 MAY 2021
Speaker: Margrethe Vestager
Language: EN

Both initiatives are based on European strengths: openness to trade, fairness in competition and diversity in size: countries, as well as businesses, strong as a whole. Just a year ago, we presented our industrial strategy to help Europe’s industry lead the twin transitions and become more competitive globally. The strategy built on our strong European industrial base, the diversity and the talents of people, and our innovative capacity. We have received many valuable inputs from this very House, from the resolution on a new industrial strategy from rapporteur, Mr Calenda, and from many other of your reports on the green transition and the digital transition. Our ambitions have not changed. We still need to fully implement the strategy of last year. We are updating it with what we learned during the pandemic. People in many businesses have suffered, and this goes for a number of sectors, in particular tourism, cultural and creative industries, textiles or mobility. At the same time, this year has shown our economies and our societies at their best. We have seen the healthcare professionals, the frontline workers, continuing to do their jobs despite very difficult circumstances. Essential services have continued to deliver throughout the crisis, and this shows the fundamental resilience of our economy. Many companies – and that of course also goes for small and medium—sized companies – have switched production to meet urgent needs, whether that be for personal protective equipment, hand sanitisers or, more recently, vaccines. Many others have made the switch to e-commerce and used digital tools to find new suppliers. The past year has shown us how blockages to the free movement of persons, goods and services can harm our economies. Disruptions in supply chains have challenged us heavily. We felt more strongly than ever that the single market is our most important asset, and we have to put all our efforts into making that work. We have also proposed a single market emergency instrument to help us react more urgently, more quickly, in the event of a future crisis, to offer immediate solutions to facilitate the circulation of persons, goods and services, and to improve transparency on intra—EU exports and service restrictions. Some disruptions that we have seen through the last year were of a more global nature. Indeed, they have at times put at risk access to products that we cannot do without. As it’s important to base our policies on facts, we have carried out a bottom-up mapping of more than 5 000 different products and identified 137 products where the EU can be considered highly dependent on imports from third countries. Most of those dependencies can be addressed through, for example, diversification of supply chains. There are, however, 34 products which are potentially more vulnerable, given their possible low potential for further diversification and substitution with EU production. The majority of them belong to the energy-intensive industries and the health ecosystems. We need to go further to engage with Member States and industry to deepen our analysis and to address the strategic dependencies where needed, while safeguarding the open, competitive and trade—based EU economy. We need to strike a careful balance between strengthening our own capacity in strategic areas and ensuring that the EU reinforces its position in the global value chains, for example by diversifying external trade and cooperating with our external partners. This is what open strategic autonomy is all about. A genuine dialogue with industry and other stakeholders is crucial for us. I’m so happy that we have already launched the industrial forum, because it will help us to shape future directions. We are building on the productive experience of the European Battery Alliance (EBA) led by my colleague, Maroš Šefčovič. We are developing similar initiatives in the areas of raw material and clean hydrogen, and we are preparing the launch of alliances on processors and semiconductor technologies, as well as industrial data, edge and cloud. Together with the update of the industrial strategy, we also tabled a landmark proposal for a regulation on distortive foreign subsidies. With this proposal, we are putting our industrial strategy into practice by creating the conditions for fair and competitive internal markets where all companies compete on their merits. We are responding to the call from this Parliament to have a level playing field. Europe is a trade and investment superpower. In 2019, the stock of foreign direct investment in Europe was worth more than EUR 7 trillion. That’s a quarter of all foreign direct investment in the world. And that openness to investment serves us well. But openness requires fairness. For more than 60 years, our state aid rules have made sure that aid from European governments doesn’t undermine fair competition in our markets. The companies have been free to use subsidies granted by third-country governments to buy up businesses here in Europe. Some have been able to undercut their competitors in public tenders, not because they are more efficient but because they get unfair financial support. Under the proposed regulation, companies which get subsidies from non-EU countries will need our approval under this very framework before they implement big mergers in Europe. Companies will have to tell us what subsidies they have received when they bid in large public tenders, and they won’t be able to close that tender without our OK. We will have the power on our own initiative to investigate any company to see if it has received foreign subsidies that harm competition in Europe. We’re making sure that we have the right powers to put these rules into everyday practice. Europe’s economy is open and closely interlinked with the rest of the world, and we are committed to keep it that way. At the same time, we will act assertively when that is needed to keep our economy working well for its citizens. Finally, we continue our review of competition rules to make sure that they also support the green and digital transition, of course while staying true to the fundamental principles of fair competition in a single open market to the benefit of all Europeans.