CoR Plenary (December 2021)

This report contributes to the current debate on how local regional authorities (LRAs) can adopt and implement a place-based or low carbon and circular economy approach to the industrial policy strategy, identifying key opportunities and challenges and potential policy options.

The single market programme is a new, dedicated €3.7 billion (in 2018 prices) or €4.2 billion (in current prices) programme for the 2021-2027 period supporting the single market. It is particularly aimed at empowering and protecting consumers, and enabling Europe's many small and medium-sized enterprises (SMEs) to take better advantage of a well-functioning single market. On 3 May 2021, the Regulation establishing the programme entered into force, with retroactive application from 1 January 2021. The new programme aims to strengthen and streamline the governance of the EU's internal market. It will support the competitiveness of enterprises, and promote human, animal and plant health and a safe food chain, as well as financing European statistics to provide reliable data relevant to the single market.

Industry plays a pivotal role in the EU's economy and growth model. Today, however, it stands at the crossroads, heavily affected by new disruptive forces, ranging from the rise of new technologies to shifts in global economic power and evolving geopolitical circumstances. Addressing these challenges raises a number of critical dilemmas, such as the need to pursue openness of markets and trade while protecting industry from unfair competition, or the need to promote greener and more sustainable industry while maintaining its global competitiveness. It also prompts a reconsideration of the EU's strategic positioning from a defensive to an offensive policy stance. These developments have triggered a lively debate on the need for a renewed, more assertive, comprehensive and coordinated industrial policy at EU level. This paper reviews the current state of affairs and key challenges facing the EU and provides an analysis of the main policy options going forward.

Since 2015, the Juncker Plan has mobilised €380 billion of investment and supported 842,000 small and medium businesses across all Member States. In the 2014-2020 EU budget period, almost €190 billion from the EU budget is invested in research, innovation and the competitiveness of SMEs under the European Structural and Investment Funds, Horizon 2020 for research and development and COSME, the EU programme for the Competitiveness of Small and Medium-Sized Enterprises, helping SMEs get better access to finance.

The European Commission’s decision of 6 February 2019 to prohibit Siemens’ proposed acquisition of Alstom has triggered a new phase in Europe’s ongoing debate on industrial policy. In December 2018, eighteen EU Member States had issued a joint call for a more ambitious and strategic EU industrial policy, highlighting industry as ‘a key driver for growth’. There is a palpable feeling that Europe risks being left behind unless urgent action is taken. On the one hand, there is rising worry that others are not playing by the same rules and that Europe’s openness is being used against its own strategic interests. On the other, there is a realisation that Europe may not have done enough to prepare for digitalisation and rising competition, particularly from Asia. Both these concerns must now be addressed in a much more concerted and unified manner. This paper explores a possible new balance between openness and protection; between playing defence and offence – as part of a joinedup strategy.