European Commission presents EU competitiveness strategy

The European Commission (EC) has presented a strategy for an innovative and environmentally friendly EU economy – the Competitiveness Compass.

The EC characterized the presented strategy as the first major initiative of this mandate of the European Commission, its economic doctrine for the next five years.

As noted, over the past two decades, Europe has not kept pace with other major economies due to a constant gap in productivity growth. However, the bloc has everything it needs to reverse this trend, provided it takes immediate action to address long-standing barriers and structural weaknesses.

“Europe has everything it needs to succeed in the race to the top. But, at the same time, we must fix our weaknesses to regain competitiveness. The Competitiveness Compass transforms the excellent recommendations of the Draghi report into a roadmap,” said EC President Ursula von der Leyen.

The Competitiveness Compass aims to turn Europe into a place where the technologies, services and clean products of the future are invented, produced and delivered to the market. At the same time, climate neutrality should be achieved for the first time in the world.

The new strategy envisages three main areas of action: innovation, decarbonization and security.

In particular, it is proposed to eliminate the innovation gap. The EC aims to create an environment for young innovative start-ups, promote industrial leadership in high-growth sectors based on deep technologies, and disseminate technologies to established companies and SMEs.

The plan also provides a joint roadmap for decarbonization and competitiveness. The new strategy addresses high and volatile energy prices as a key challenge and identifies areas for intervention to facilitate access to clean, affordable energy.

According to the EC, the upcoming Clean Industry Agreement will set out a competitiveness-oriented approach to decarbonization, aiming to make the EU an attractive place for manufacturing, including for energy-intensive industries, as well as promoting clean technologies and new circular business models.

The Action Plan for Affordable Energy will help reduce energy prices and costs, and the Law on Accelerating Industrial Decarbonization will extend fast-track permitting to sectors in transition. In addition, the strategy provides for individual action plans for energy-intensive industries, such as steel, metals, and chemicals, which are the backbone of European manufacturing but are most vulnerable during the transition.

The third area is to reduce overdependence and improve security. It is noted that the EU’s ability to diversify and reduce dependence will lie in effective partnership.

“To keep diversifying and strengthening our supply chains, the Compass refers to a new range of Clean Trade and Investment Partnerships to help secure supply of raw materials, clean energy, sustainable transport fuels, and clean tech from across the world.,” the statement said.

As for the domestic market, the revision of public procurement rules will allow for the introduction of European preferences in this area for critical sectors and technologies.

In December, Stefan Sejourne, Executive Vice President of the European Commission for Prosperity and Industrial Strategy, said that the European Commission would focus on strategic sectors, including metallurgy, automotive and aerospace, as well as clean technologies.