Recovery first, then transformation: a new strategy for European industry

What should tomorrow’s European industry look like? We know the underlying rhetoric: we need to prioritize ecological and digital transitions, and at the same time strengthen long-term competitiveness and economic and social resilience. That discourse had already been incorporated in the EU’s industrial strategy the European Commission presented in March, just before the coronavirus pandemic broke out, but the impact of Covid-19 has left it outdated, entailing a review that must include the impacts of the pandemic.

In the plenary sitting last week, we approved the position of the European Parliament in order to influence this review. Parliament argues that we first need to get out of this crisis by saving all possible jobs, and especially protecting small and medium-sized enterprises, which are the most vulnerable to the effects of the crisis. And once European industry—which accounts for over 20% of the EU economy and employs around 35 million Europeans, in addition to the millions of indirect jobs in and outside the Union—has recovered from the shock, we must help it transform. A transformation that must have ecological and digital transitions as vectors and that will have to be supported by powerful public stimulus.

If the EU is to maintain its industrial base and at the same time move forward with its commitments to the European Green Deal, it is time to set the right course towards a more sustainable, cleaner industrial policy. It is essential to phase out fossil fuels, coal and oil—both overall and in each business—and gradually replace them with renewable, non-polluting energy sources such as solar, wind and green hydrogen; to invest heavily in energy and resource efficiency; and to foster the circular economy, a pillar of ecological modernization.

But we also need to make a socially just transition in the industrial sector, facilitating the adaptation of workers to the jobs of the future, aiding those workers and territories that are most affected by the industrial transformation, ensuring decent working conditions and wages, and combating the gender pay and pensions gap.

Furthermore, within the framework of the open strategic autonomy that the EU aims to achieve, the Union’s dependence on other parts of the world for strategic supply chains must be reduced, increasing diversification and sustainability, preventing the relocation of European manufacturing, protecting those industries that are considered strategic against certain foreign investments, and all the while preserving an open market.

With the review of its industrial strategy, the Commission now has the opportunity to draft a powerful, sustainable and socially responsible European Industrial Policy, with the aim of positioning the EU as a world leader in innovative ecological product and service industries that will help forge resilient and cohesive societies.

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