Industrial policy is back on the European agenda. The proposal launched by the European Union in March this year was an urgent one, but now it has become crucial for the economic growth and well-being of Europeans.
The COVID-19 crisis has accelerated digitisation processes around the world, to the extent that we can speak of a fundamental paradigm shift. We should choose a different starting point when we think and act with a view to the future. What kind of society do we want to create and what will the role of digital technology be in that society? As Chancellor Angela Merkel declared, Europe can emerge from the crisis stronger than when it began if it is able to reach far-reaching agreements and move towards more inclusive, digital, sustainable and resilient societies.
Faced with the greatest economic crisis in the history of European integration, the roadmap laid out by the European Industrial Strategy must be fine-tuned and defined to minimise national protectionism, modernise the rules on competition and supervision of markets and draw up an ethical data and artificial intelligence plan.
In turn, Europe’s economic and social foundations must be reinforced by a globally competitive industrial sector and its key assets, technologies and critical infrastructures must be safeguarded. For this purpose, there should be coordination between the European institutions and the member States in order to invest in innovative technologies, clean industries and, in particular, key infrastructures such as 5G and artificial intelligence. The above will help European industry to compete on the international stage with competitors from other regions of the world, leading to an early recovery from the crisis.
In this regard, the European Round Table (ERT) already presented a series of ideas in the document “Turning global challenges into opportunities“, which is absolutely valid at this time. It highlighted the urgency of accelerating the process of digital transformation by strengthening the EU’s technological sovereignty in strategic value chains and called for:
- Develop the digital single market and strengthen investment in research and innovation;
- Reach a coordinated European agreement to deploy 5G infrastructure across Europe. This requires a framework that reduces the cost of spectrum and the deployment of innovative applications and provides better regulatory incentives for private investment.
- Invest in digital education and training in critical areas such as advanced data analytics, AI or cybersecurity; as well as promoting dual learning and digital upskilling and reskilling of employees.
- Modernising EU competition policy to help European businesses compete at scale.
- Act more quickly to enforce the rules and adopt a more holistic system of competition and a dynamic view of market practices and structures, especially with regard to the use of data as a competitive asset.
- Make the rules on state aid more flexible in order to encourage research and cooperation in strategic areas.
It will be equally important for a united EU to pursue its own interests on a global scale, with the member States acting together as an area with a common currency, as well as its trade policy with its approach to encourage mass investment.
Although we witnessed measures reflecting disunity, unilateralism and a certain degree of national protectionism in the initial months of the health crisis, the EU has proved itself to be capable of getting back on track. In fact, Ursula von der Leyen, the President of the European Commission, presented the “Next Generation EU” plan to the European Parliament on 27th March with a Recovery Fund to overcome the coronavirus crisis: 750,000 million euros, of which 500,000 million euros will be made available as subsidies and 250,000 million euros will comprise loans. In her speech, she made an appeal for cooperation and unity by inviting everyone to “make a leap forward together” with a plan that seeks to invest in digitisation, communication infrastructures and energy transformation and repair the social fabric while protecting the Single Market and rebalancing the budgets across Europe.
A crucial moment for the rotation of the Presidency of the Council
Germany will assume the Presidency of the Council of the EU on 1st July, with a key responsibility to cushion the blow of the economic crisis and the resulting social damage. Although the details of the programme of the German Presidency are yet to be revealed, the priority issues will be the climate-neutral reconstruction of the economy, the way the digital transformation moves forward and Europe’s role in the world.
Germany, leading and mediating between the member States, together with the presidents of the different EU institutions, must forcefully promote European interests and the Union’s fundamental principles. Only in this manner will it be possible to guide the EU through these complex and testing times.
The German Presidency will also need to address the matter of additional financial cushioning. The negotiations with regard to the EU’s forthcoming Multiannual Financial Framework could lead to a rethinking of the most costly policies triggered by the COVID-19 crisis. Any review of the EU budget should prioritise investment in research, innovation, technological competitiveness and health protection, as well as measures to combat climate change.
The pandemic has demonstrated the importance of close cooperation in all areas. When Germany takes over the Presidency on 1st July, it will face the essential task of boosting short-term crisis management in the EU and among its member States. But it must also continue to develop European and international instruments capable of overcoming the challenges it faces. The aim must be for Europe to emerge bolstered from the crisis. Therefore, Berlin mustn’t limit itself to the role of mediator and should constitute a driving force for change.