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EU must provide 'stable' regulatory environment for industry (TheParliament.com)

EU must provide 'stable' regulatory environment for industry (TheParliament.com)

2012-10-15

Europe's manufacturing industry needs "stable and predictable" regulatory policies, if it is to thrive in an increasingly global economy, a Parliament Magazine debate has heard.

Article written by Brian Johnson

The event, hosted by veteran S&D deputy Jo Leinen and organised in association with French engineering giant Alstom, focused on what role EU policymakers could play in helping retain and support Europe's manufacturing sector.

Keynote speaker Patrick Kron, Alstom's CEO and chairman, told MEPs that a stable and predictable regulatory framework was a critical element to the future success of Europe's manufacturing businesses, arguing that, "Any policy is fine, but it has to remain stable. Business can adapt to anything as long as it's clear and stable."

Kron added, "If you want capital intensive projects to happen, whether through the public or private sector, you need stability."

Innovation and research

Paraphrasing Danish physicist Niels Bohr's famous quote, Kron said, "the future is more difficult to predict than the past", and "that is why Alstom continues to invest heavily in innovation and research and development".

This, said Kron, was a crucial factor in keeping Europe's manufacturing sector globally competitive. With Europe a difficult environment to compete globally on costs, Kron said, "When we look at the current global business environment, we see ourselves differentiating through innovation."

"Europe has to move ahead on research and development...we need to invest in innovation if we want to be successful globally."

Opening the event, Jo Leinen said, "We have, in Europe, companies that are global leaders, that are innovative. The question, however, is what can we do for these businesses that are competing in that global environment?"

Listening to industry needs

Portuguese deputy Maria da Graça Carvalho also addressed the event, on what she called an "important but difficult topic".

Carvalho argued that it was, "of utmost importance that we, as EU policymakers, listen to industry needs and keep our manufacturing industrial base here in Europe."

"We know that the sector is confronted by difficulties and bottlenecks, such as a lack of regulatory harmonisation between member states, inadequate standardisation and problems in gaining finance."

"However, I want to stress that the EU can play a role and that MEPs in this parliament are working together to remove the bottlenecks and barriers that industry faces.

Carvalho
, a former Portuguese science and education minister and former adviser to European commission president José Manuel Barroso, argued that the upcoming EU budget could be a "crucial instrument" in assisting Europe's businesses in their struggle to access finance.

"In my opinion, it is essential that the new budget has simple and flexible rules for accessing funds and that the budget's priorities are correctly defined to focus on jobs and growth."

"It's important that we come up with innovative solutions. Regional funds, research programme funds should all be contributing to the same objectives.

She also stressed that making the EU's financial markets viable again and policies, such as the late payment directive should be "urgent" priorities for EU policymakers.

"We should make sure that the public sector pays its bills properly. The issue of late payment is a big problem and a significant bottleneck for industry."

Better regulation


Improving industry competitiveness by creating a more favourable regulatory climate was also an issue she said. "We need smaller regulation, that's better and not unnecessary regulation. We need a 'bureaucracy test'."

Carvalho also drew attention to the EU's latest bid to promote the re-industrialisation of Europe, outlined last week by European commission vice-president for industry and entrepreneurship Antonio Tajani.

"It's not up to us as policymakers to tell industry what to do but we can help by supporting them through competitiveness and innovation programmes," she said.

"We want to attract industry and inward investment to Europe, and for that we need an integrated industrial policy. This needs to be designed on the basis of a policy that will help Europe's businesses."

Carvalho, herself a trained mechanical engineer, also called for more to be done to encourage young people to take up engineering and technology studies.

"We need to attract more people into engineering and technology and we need to attract more women."

During a wide ranging discussion, intellectual property rights, EU carbon markets and the issue of establishing a level playing field for Europe's businesses on issues such as foreign procurement laws were also highlighted.

Patrick Kron argued that the final outcome on the scope of the EU's long term budget would play a key role in developing business confidence, saying that, "The multiannual financial framework will send a strong signal on what issues and problems the EU wants to address."

Technology loss

Kron also highlighted that the EU's carbon price was a critical element in maintaining competitiveness, warning that the current oversupply of CO2 allocations and the resulting decline in their value "was not giving out the right signals on decarbonisation".

British ALDE deputy Chris Davies, who was the European parliament's rapporteur for the carbon capture and storage (CCS) directive warned participants that the EU was heading for "crunch time" on the technology.

More than five years had passed since EU leaders agreed that up to 12 CCS demonstration projects should be in operation by 2015, he said.

"Almost four years have passed since a limited funding support mechanism was approved, yet today, not a single project has been given the all clear. If decisions are not reached by the end of this month, Europe will send out a clear signal to the world that it has given up on CCS," he warned.

"There is no option but CCS for dealing with emissions from major industrial plants. Demonstration on a large scale is needed to reduce costs and raise efficiencies. If the price attached to the release of CO2 is high then CCS may offer financial advantages, but current carbon prices are far, far too low to support its development without large subsidies."

Davies' call for action on CCS was also backed by Kron, who added, "Not a single project has been started. The rules were not business-friendly enough to make these projects happen. If we are not careful, we will lose this technology to competitors like China."

"China will capture the technology that Europe has not been able to grasp."

Intellectual property rights

The thorny issue of intellectual property (IP) rights was also discussed, with Kron arguing that Europe's businesses had to be "protected and that protection must be enforced".

"European companies need to invest in technology, so we need the right kind of policy frameworks and we need IP protection for those investments."

In response to comments from French socialist MEP Catherine Trautmann calling for the need for "European champions" that can compete with emerging nations like China, Kron said, "Yes, we need European industrial champions, [but] they need to be global champions with strong European roots."