An industrial renaissance - 6 June 2013: Conference in Brussels on ways to promote reindustrialisation in Europe
Following the European Commission blueprint for raising industry’s contribution to EU GDP from 15.2% to 20% by 2020, a conference on Industrial Policy on 6 June in Brussels was focussing on progress made so far and what urgent further action can bring immediate benefits to help restore industrial growth.
It is time to check out on the reaction of public authorities and industry to this new impulse to put growth and job creation at the forefront of European priorities and industry as the main driver of economic recovery. The Conference will also unveil the next steps in the development of this new industrial policy that should help us raise industry’s contribution to the European GDP.
Join President Barroso, Vice President Tajani, Industry Ministers and leading EU business leaders on this occasion in an open debate about the future of industry. In particular, the conference will look at how national and European efforts can maximise the effectiveness of EU interventions? Can Europe do more to coordinate industrial policies in a partnership approach?
European Commission Vice President Antonio Tajani said: "The crisis has demonstrated the importance of industry for economic stability, employment, innovation and the international performance of our economies. The conference will highlight that creating more industry brings more jobs. In a period of record unemployment in Europe, putting industry back at the core of European policies is an inescapable obligation."
The conference: "European Industrial Policy: A Partnership for Growth"
The conference brought together 400 top political leaders, business people and industry experts to discuss how we can work together in the spirit of partnership to ensure the Commission’s new industrial policy will bring growth back to Europe.
6 June 2013, Brussels
Issues discussed during the conference:
Without industry recession would be deeper
To date, none of the five largest EU economies have reached their pre-crisis level of manufacturing output. Germany is close to it while manufacturing industries in the other large economies still have a long way to go. Manufacturing recovery is stronger than GDP recovery in Estonia, Latvia, Lithuania, Poland, Romania and Slovakia.
Many Member States are finding in industrial exports a remedy to the faltering internal demand in times of deleveraging and fiscal consolidation. Exports (and 80% of them are coming from industry) have contributed with 1.2% to the EU GDP in 2012. Without them, the recession would be deeper.
What can be done to relaunch industry?
The Commission has put in place new instruments:
- The Steel Action Plan will soon be adopted.
- The Entrepreneurship Action plan is being rolled out.
- Fitness checks are testing the cumulative impact of EU legislation on key industrial sectors.
- Six Commission task forces taking actions to foster innovation in the following fields:
- Advanced manufacturing Technologies for Clean Production
- Markets for Key Enabling Technologies
- Bio-based product markets
- Sustainable industrial policy, construction and raw materials
- Clean vehicles and vessels
- Smart grids
Member States are developing their own strategies and the Commission will issue its economic recommendations at the end of May, just a few days ahead the this industrial policy conference
What is the reaction of industry?
Gross investment has displayed negative growth since the outbreak of the crisis with the only exception of 2011 when it grew by just 1.5%. The outlook for 2014 seems more positive. Industry has welcome this new orientation in EU policies but it is necessary to know what steps are being taken by the private sector and what are their expectations about European and national policies.
How is industry reacting to these new policy developments? What is needed to relaunch investment for the adoption of new technologies? Are we succeeding in increasing the internationalisation of European firms? What else is needed at EU and Member state level?
Financing industrial investments in the aftermath of the banking crisis
Financing business activities has become an increasingly difficult problem for SMEs in general but also for larger firms, especially in those countries that have been harder hit by the crisis. Access to capital is always essential for innovation and competitiveness. At present, it has become a vital need for the survival of some firms having serious difficulties given the difficulties to finance their operations in the way they used to do it in their home capital markets. Therefrom, the conference will pay special attention to access to finance:
New measures are already helping firms and SMEs in particular. The Directive on Late payments will help firms to maintain their cash flows and the Green paper on the financing of long term investment has been published.
Developing alternatives to bank financing
The European Commission seeks to develop a framework for efficient, diversified and improved long-term financing for SMEs by helping to attract more private investments.
- European venture capital passport: The proposal for a ‘European Venture Capital Funds’ will facilitate cross-border fundraising.
Improving SME access to capital markets: Two recent proposals are currently being discussed to attract investors through more visible SME markets and more visible listed SMEs:
- A proposal for the Markets in Financial InstrumentsDirective (MiFID) to sustain the development of stock markets specialised in SMEs.
- A proposal for a modification of the Transparency Directive to give better information on listed SMEs.
The Commission and the EIB are working on new formulas to reach farther with new formulas that can be suitable to finance industrial investments, especially for innovation, energy saving and sustainable growth. The cooperation of commercial banks will be a valuable contribution to this effort.
How could we accelerate the developments of alternatives to traditional bank lending to firms? Bank credit will remain a significant component in the financing of industrial activities. What is needed to needed to reactivate bank lending? What can public sector credit institutions such as KfW, Caisse de Depots or ICO do in this sense in the present circumstances?