| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2014) 14 final (22.1.14) |
| Publication Date | 22/01/2014 |
| Content Type | Policy-making, Report |
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The European Union is emerging from its longest-ever recession. EU28 GDP grew by 0.2% in the third quarter of 2013. The upturn in business sentiment and confidence indicators suggests that structural reforms, macroeconomic governance improvements and measures in the financial sector have succeeded in stabilising Europe’s economy. The EU is on the right track, but the recovery remains modest, with Commission forecasts of 1.4% GDP growth for the EU28 in 2014 and unemployment rates close to 11% for the next two years. That is why fostering growth and competitiveness to sustain and strengthen recovery and to achieve the goals of the Europe 2020 agenda have become the top priority for the Commission and EU Member States. The crisis has underlined the importance of the real economy and a strong industry. Industry’s interactions with the rest of Europe’s economic fabric extend far beyond manufacturing, spanning upstream to raw materials and energy and downstream to business services (e.g. logistics), consumer services (e.g. after-sales services for durable goods) or tourism. Industrial activities are integrated in increasingly rich and complex value chains, linking flagship corporations and small or medium enterprises (SMEs) across sectors and countries. The economic importance of industrial activities is much greater than suggested by the share of manufacturing in GDP. Industry accounts for over 80% of Europe’s exports and 80% of private research and innovation. Nearly one in four private sector jobs is in industry, often highly skilled, while each additional job in manufacturing creates 0.5-2 jobs in other sectors. The Commission considers that a strong industrial base will be of key importance for Europe’s economic recovery and competitiveness. Overall, EU industry has proved its resilience in the face of the economic crisis. It is a world leader in sustainability and returns a €365 billion surplus in the trade of manufactured products (€1 billion a day), generated mainly by a few high- and medium-technology sectors. They include the automotive, machinery and equipment, pharmaceuticals, chemicals, aeronautics, space and creative industries sectors, and high-end goods in many other sectors, including food. Nonetheless, the legacy of the crisis is severe: since 2008, 3.5 million jobs have been lost in manufacturing; the share of manufacturing in GDP has fallen from 15.4% to 15.1% in the last year; and the EU’s productivity performance continues deteriorating in comparison to that of our competitors. Two recent Commission reports have identified a number of weaknesses hampering growth. Internal demand remains weak, undermining European companies’ home markets and keeping intra-EU trade subdued after the crisis. The business environment has improved in the EU overall but progress remains uneven. Inflexible administrative and regulatory environments, rigidities in some labour markets and weak integration in the internal market continue to hold back the growth potential of firms, especially SMEs. Investment in research and innovation remains too low, holding back the necessary modernisation of our industrial base and hampering future EU competitiveness. EU firms face higher energy prices than most of our leading competitors, and have difficulties to access basic inputs such as raw materials, qualified labour and capital in affordable conditions. Against this background, the Commission has been pursuing an integrated industrial policy approach as outlined in the Industrial Policy Communications of 2010 and 2012 and has issued growth-enhancing recommendations to Member States in the context of the European Semester. Full implementation of this policy approach at European and national levels is critical to ensure our future competitiveness and to increase our growth potential. To be effective, policy actions must be well co-ordinated and consistent from regional to the EU-level. As a contribution to the European Council debate on industrial policy, this Communication sets out the Commission’s key priorities for industrial policy. It draws on the Annual Growth Survey, provides an overview of actions already undertaken and puts forward selected new actions to speed up the attainment of these priorities. It shows that industrial policy and other EU policies are getting gradually more and more integrated as indicated in the flagship industrial policy communication in 2010 and why this mainstreaming process must continue. Most importantly, this communication stresses the importance of full and effective implementation of industrial policy in the EU and aims to facilitate this. In this process of implementation of reforms to improve competitiveness, Member States will play a capital role. The development of new instruments such as the “Partnerships for Growth, Jobs and Competitiveness”, can be very helpful to improve effectiveness in the implementation of those reforms. |
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| Source Link | Link to Main Source http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2014:014:FIN |
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| Subject Categories | Business and Industry |
| Countries / Regions | Europe |
