«EU INDUSTRIAL POLICY: ASSESSMENT OF RECENT DEVELOPMENTS AND RECOMMENDATIONS FOR FUTURE POLICIES STUDY Abstract Following disregard in the 1980s, ...»
COSME In addition to Horizon 2020, another EU measure that is relevant for industrial policy is the COSME Programme managed by DG Enterprise and Industry, which aims to boost competiveness for growth and jobs in Europe. The Programme is expected to continue on the path set out by the Competitiveness and Innovation Framework Programme (CIP) during the 2007-2013 programming period47. With a proposed budget of €2 billion, it is European Commission (2014), Digital Agenda Targets Progress Report: Digital Agenda Scoreboard, https://ec.europa.eu/digital-agenda/en/news/scoreboard-2014-progress-report-digital-agenda-targets-2014 CIP included three sub-programmes – the Entrepreneurship and Innovation Programme (EIP), the Information and Communication Technology Policy Support Programme (ICT-PSP) and the Intelligent Energy Europe Programme (IEE). According to the CIP Performance Report (published in March 2012), with an overall budget PE 536.320 37 EU Industrial Policy: Assessment of Recent Developments and Recommendations for Future Policies estimated that COSME will contribute to an annual increase of €1.1 billion for the EU’s GDP through a leverage effect.
According to the 2015 COSME work programme, a budget of €264 million will finance 27 actions under the Programme’s four objectives, namely:
i. improving access to finance for SMEs in the form of equity and debt;
ii. improving access to markets, particularly inside the Union, but also at a global level;
iii. improving framework conditions for the competitiveness and sustainability of Union enterprises, particularly SMEs, including the tourism sector;
iv. promoting entrepreneurship and an entrepreneurial culture.
Employment and Social Innovation (EaSI)
Resources for the industry sector will also be provided by the EaSI programme (the proposed budget amounts to €815 million for the 2014-2020 period), which integrates and extends three existing programmes, namely Progress (Programme for Employment and Social Solidarity), EURES (European Employment Services) and European Progress Microfinance Facility48.
Additionally, under the heading of Sustainable Growth (see Figure 8 above), the European Union will direct around €373.2 billion of its budget to exploiting the potential of its environmental goods and to helping industries to become more sustainable. A very significant share will be dedicated to the First Pillar of the Common Agriculture Policy (CAP), but a share will also be dedicated to SMEs in rural areas and in the fisheries sector (through the European Agriculture Fund for Rural Development (EAFRD)49, and the European Maritime and Fisheries Fund (EMFF), respectively).
Lastly, the overall picture should be completed by mentioning the significant means available from the European Investment Bank (see Box 7 below).
of EUR 3.6 billion these sub-programmes have been helping the start-up and growth of SMEs throughbetter access to finance, offering business support services, creating a favourable environment for SME cross-border cooperation and promoting innovation.
They will be allocated 61%, 18% and 21% of the budget, respectively.
74% and 23% of the sustainable growth budget, respectively.
Box 7. The contribution of the European Investment Group The European Investment Group – including European Investment Bank and the European Investment Fund – significantly stepped up its financial support in 2013 to promote growth and jobs in Europe. It provided around EUR 75.1 billion (an increase of 37% compared to 2012). Access to finance was significantly enhanced for SMEs. The European Investment Bank signed loans worth EUR 18.5 billion for SMEs and mid-caps, while at the same time the European Investment Fund committed EUR 3.4 billion. This allowed the Group, together with private investment partners, to mobilise more than EUR 50 billion to support SMEs.
Overall, a total of 230 000 companies employing 2.8 million people across Europe received direct or indirect support through EIB Group activity. In addition, the EIB Group focused on research and innovation, providing EUR 17.2 billion in financial support to increase the competitiveness of Europe’s economy. Also, in July 2013, the EIB launched a dedicated youth employment programme “Skills and Jobs – Investing for Youth” to complement Europe’s fight against youth unemployment. The programme had an initial lending volume of EUR 6 billion.
Focusing on the European Investment Bank alone, it is worth noting that in 2013 there was project financing of EUR 72 billion in support of the objectives of the European Union, of which EUR 64 billion in the Member States of the Union and EUR 8 billion in the partner countries. The EIB provided around EUR 5.5 billion to industry and EUR 25.9 billion to credit lines.
Source: http://europa.eu/rapid/press-release_BEI-14-33_en.htm, http://www.eib.org/projects/loans/.
3.2.2. Regulatory power To create a better environment for its manufacturing industry and to boost its competitiveness, the EU makes use of several regulatory binding instruments in different policy fields including: competition policy, internal market, research and innovation, trade policy, energy policy, and enhancing the business environment.
Both industrial and competition policies share the same objective of improving the competitiveness of the industrial sector. Since the first policy communication, EU industrial policy has always emphasised the principle of market competition; on the other hand, the target of the competition policy – which is primarily the responsibility of DG Competition within the European Commission - is to protect the competition order favourable to industrial development. State aid prohibition, merger control 5051 and antitrust policy5253 are the main instruments of the EU competition policy to enable companies to innovate and to increase their productivity and thereby to improve their position in the global market.
Council Regulation (EC) No. 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation), Official Journal L 24, 29 January 2004, pp. 1-22.
Consolidated version of Commission Regulation (EC) No. 802/2004 of 21 April 2004 implementing Council Regulation (EC) No. 139/2004 on the control of concentrations between undertakings (Text with EEA relevance) (the "Implementing Regulation") and its annexes (Form CO, Short Form CO, Form RS and Form RM) (Official Journal L 133, 30 April 2004, pp. 1-39), as amended by Commission Regulation (EC) No.
1033/2008 (Official Journal L 279, 22 October 2008, pp. 3-12) and by Commission Implementing Regulation (EU) No. 1269/2013 of 5 December 2013 (Official Journal OJ L 336, 14 December 2013, pp. 1-36), more recent changes made to the text of the Implementing Regulation and to three of its annexes (the Form CO, Short Form CO and Form RS) as part of the Commission's Merger Simplification Package, which came into force on 1 January 2014.
Between actual or potential competitors operating at the same level of the supply chain.
Between firms operating at different levels, i.e. agreement between a manufacturer and its distributor.
PE 536.320 39 EU Industrial Policy: Assessment of Recent Developments and Recommendations for Future Policies State aid control, regulated under Arts. 107 and 108 of the TFEU, has an important bearing on the form an EU industrial policy takes, since it prohibits targeted public support. It is intended to avoid distortions in the Single Market and to ensure that subsidies promote the competitiveness of sectors and companies. The European Commission has strong investigative and decision-making powers in this field. To implement the Aid measures, Member States must indeed follow a notification procedure - except in certain instances54 which requires the approval of the Commission. An ambitious state aid reform programme was set out by the European Commission in May 2012 in the “Communication on State Aid Modernisation (SAM)” which introduces reforms of state aid rules to foster the internal market and promote economic growth. Its objectives also include increasing the focus on those cases with the largest impact on the internal market, streamlining the rules and accelerating the decision-making process. The Commission proposed identifying common principles for assessing the compatibility of aid with the internal market and revising a series of state aid guidelines and regulations in order to make them consistent with those common principles, including rules concerning investments in research, development and innovation by SMEs and rules regulating SMEs’ access to finance55. The SAM initiative and its objectives are strongly supported by the European Parliament, which, in January 2013, adopted a resolution on state aid modernisation. The latter underlines the need for less but better targeted state aid that will support the shift to a knowledge economy. The resolution also called on the Commission to provide detailed criteria for distinguishing between important and less important state aid cases.
Since Maastricht, the Internal Market has constituted a key instrument for achieving a competitive Europe. The Commission provided new impetus to market integration across the EU through the Single Market Acts I and II and initiatives such as the market surveillance and product safety package. In particular, the Single Market Act II put forward four actions56 to foster the development of maritime, air and rail transport, as well as an initiative to strengthen the implementation and enforcement of the Third Energy Package to liberalise and integrate European energy markets.
The fact that the internal market is not fully integrated (especially in terms of services) is considered to be an important factor holding back productivity gains. In this regard, it is worth stressing that in order to foster the smooth functioning of the internal market, the European Commission obliged Member States to implement the Service Directive 57 by 28 December 2009. The Service Directive for European industrial competitiveness is relevant because the simplification measures foreseen by the Directive significantly facilitate life and increase transparency for SMEs and consumers when they want to provide or use services in the Single Market.
These include: aid covered by a Block Exemption (giving automatic approval for a range of aid measures defined by the Commission), de minimis aid not exceeding €200,000 per undertaking over any period of three fiscal years (€100,000 in the road transport sector), aid granted under an aid scheme already authorised by the Commission).
Other revisions include: rescue and restructuring aid; regional aid; agriculture; environmental and energy aid;
promotion of important projects of common European interest; broadband; aviation guidelines; general block exemption regulation; enabling regulation; de minimis regulation.
Developing fully integrated networks in the Single Market; Fostering the mobility of citizens and businesses across borders; Supporting the digital economy across Europe; Strengthening social entrepreneurship, cohesion and consumer confidence.
Directive 2006/123/EC of 12 December 2006 on services in the internal market.
As reported by a European Commission working document 58, the implementation of the Service Directive has been challenging particularly because of its broad scope. It covers around 65% of service activities within the services sector. The activities covered represent around 45% of total EU GDP and employment. In addition, the Services Directive required Member States not only to assess and where necessary adjust their laws in many areas, but also to take very concrete and practical steps such as setting up Points of Single Contact and making administrative procedures available in electronic form. Significant progress has been made in this regard, but efforts still need to be stepped up to finalise the required changes in legislation and to set up fully operational Points of Single Contact.
The proper functioning of the Single Market is one of the objectives pursued by DG Internal Market and Services and DG Enterprise and Industry within the European Commission.
While the former is entrusted with policies concerning the protection of intellectual property rights, the services sector and public procurement, the latter is committed to managing measures ensuring the free movement of goods in the internal market (required by arts. 34 to 36 of the TFEU, which prohibit Member States from maintaining or imposing barriers on intra-EU trade in goods).
European Commission (2012), Detailed Information on the Implementation of Directive 2006/123/EC on Services in the internal Market. Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the implementation of the Services Directive. Brussels, 8 June 2012, SWD(2012) 148 final. A partnership for new growth in services 2012-2015
Single Market rules can have their intended effects if they are completely and correctly transposed into Member States’ national law by the agreed deadline. The figure below shows the results of the proper functioning of the Single Market as recorded by the monitoring of transposition on the basis of five indicators, namely: 1) the transposition deficit (the gap between the number of Single Market directives adopted at EU level and those in force in Member States); 2) progress over the last six months (measuring changes in outstanding directives); 3) number of directives overdue by two years or longer; 4) delay in terms of transposition of overdue directives; and 5) the compliance deficit (number of incorrectly transposed directives).
As shown in the figure below, countries such as Austria, Belgium, Cyprus, Romania and Slovenia still have deficits in the transposition of directives concerning the Single Market.