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What you want to know: Competitiveness in the European Union

Met dank overgenomen van Duits voorzitterschap Europese Unie 2e helft 2020 (Duits Voorzitterschap), gepubliceerd op vrijdag 23 oktober 2020.

What would you want to ask Germany's Presidency of the Council of the EU? Our series answers three questions asked by citizens. This time, the questions concern industrial competitiveness in the EU.

  • 1. 
    What does ‘industrial strategy’ in Germany and in Europe mean?

An industrial strategy comprises policies to the benefit of industry and usually a plan for the coming years and decades, to foster the further development of industry. For this purpose, industry is regarded as a whole: what do we need to do, or change, so that employees, employers and industrial enterprises can further develop, or as an economist would say, “remain competitive”? In a social market economy, the following aspects are particularly important in this context: do we still have a good policy environment for industry? What about the tax burden, jobs and other costs? Do we provide adequate support to industry, and which technologies are important for the future of the whole of society and for industry in particular? Are other sectors of the economy well positioned, so that they can also serve industry? This includes issues related to initial and further training, trade policy and competition law. These factors need to be adequately taken into account so that industrial enterprises can perform well and be competitive and thus contribute to growth and prosperity.

  • 2. 
    What does it mean to sustainably strengthen industrial competitiveness?

First of all, competitiveness means a kind of viability. A competitive company can compete with others on the market, that is, it sells its products on the market at competitive prices and generates profits. The government also has the task of strengthening the competitiveness of the economy as a whole, and of industry in particular, by means of the right policies. This includes optimising the policy environment, as already mentioned. Sustainable strengthening means that the respective policy measure has a lasting positive impact - in contrast to support with short-term consequences. The sustainable measures which are being currently discussed include policies to combat climate change - for example, by saving CO2 - or digitization; for example, by developing new digital technologies. These will be decisive for economic development in the coming years and decades. Sustainable strengthening can, for example, take the form of political support for the conversion of industrial production so that it becomes more efficient and consumes fewer resources.

  • 3. 
    How can industry in Germany and Europe recover from the COVID-19 pandemic?

The COVID-19 pandemic has resulted in a very difficult economic situation for industry in Germany and Europe. At the beginning of the crisis, many firms faced a sharp drop in revenues due to declining consumer spending and falling demand for German and European industrial products from foreign companies.

Although the economy is slowly but surely recovering, we will be seeing and feeling the consequences for a long time to come. A lot has already been done to provide immediate support to industry in Germany and Europe for the coming months. Thanks to short-time work, the vast majority of industrial enterprises in Germany have been able to bridge the crisis. In addition to these and other immediate assistance measures, long term investment is now useful to foster economic growth. This is where the government can play a key role by creating incentives for large scale private investment in forward looking areas - for example, by means of co-financing. Hydrogen technologies, for instance, offer promising possibilities to replace rather harmful production processes or fuels with more climate friendly ones. In the fields of steel production or heavy goods transport, for example, hydrogen can be a more sustainable alternative. When many European industrial enterprises, which are active as pioneers in the same technological field, work together, for instance, in the context of an IPCEI (Important Project of Common European Interest), industry can not only recover from the COVID-19 pandemic, but also make itself fit for the future.

Info

The European Union thrives off of the interest and engagement of its citizens. That's why we want to know: what questions do you have for Germany’s Presidency of the Council of the EU? What do you want to know from political decision-makers in the ministries? Our series “3 questions, 3 answers” puts your questions about important topics of the Council Presidency to a vote on our social media channels. The three most popular questions will then be answered on eu2020.de.

On this topic

Competition drives prosperityInternal link

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Informal Videoconference of EU Ministers for Competitiveness: “We must set the course for the future”Internal link

On Friday, 23 October 2020, an informal videoconference of the EU and EFTA ministers responsible for competitiveness took place under the auspices of Germany's Presidency of the Council of the EU.

European Competition Day: Federal Minister Altmaier presents ambitious agenda on COVID-19, digitisation and systemic competitionInternal link

The Federal Ministry for Economic Affairs and Energy is holding the European Competition Day in Berlin on 7 and 8 September 2020. The event is the central conference on competition policy during Germany's Presidency of the Council of the EU.


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