European Industrial Policy

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For quite some time now, a not insignificant part of the regulatory framework concerning industry has been set in Brussels. A central role is played by the Competitiveness Council, which is tasked with feeding legitimate business interests into the decision-making process at European level. European industrial policy is of great importance for Germany in particular, given that 25 % of the total value added by the manufacturing sectors of all 27 EU member countries is produced by German industry.

Initiatives for the various sectors are an important element of European industrial policy. The Commission and the Member States work together with industry and other players to assess the situation in the respective industry. On the basis of this assessment they develop a strategy to boost international competitiveness. However, the goal is not government intervention to control the structure of industrial sectors. Rather, the aim is to respond to specific sectoral characteristics in the context of horizontal issues, such as availability of skilled labour, innovation or protection of intellectual property rights, and thus to improve the conditions for industrial activity. For example, there have been and still are sectoral initiatives for the automotive, electrical engineering and chemical industries.  

In the interest of the competitiveness of European industry it is necessary for the European Commission to intensify its efforts together with the Council and European Parliament to cut bureaucracy. Regulatory intensity - and the burden this imposes on industry - has increased significantly over the past few decades. Today enterprises face a wide variety of legal requirements which may seem insignificant individually, but which taken together may involve massive costs and restrictions of entrepreneurial freedom.

Since a large proportion of commercial law is now established by the EU or based on European rules, it is necessary to screen the European law established over the decades to find possibilities to relieve the burden. The implementation of the reduction programme which has already been decided and according to which unnecessary bureaucracy resulting from European law is to be reduced by 25 % by 2012, is a milestone on the road towards lightening the burden on enterprises and industry. However, further comprehensive measures have to be taken.

European state aid rules strictly limit the selective provision of aid to enterprises by the Member States in order to avoid distortions of competition within the internal market as far as possible. The European Commission is also required to ensure the balanced implementation of state aid rules in the European Union (e. g. environmental state aids). The Federal Ministry of Economics and Technology supports a clear subsidies discipline. Subsidies can be appropriate to compensate external effects (e. g. to avoid polluting emissions), but their cost-effectiveness has to be thoroughly scrutinised. The Federal Government's strategy is to reduce subsidies designed to maintain existing structures and to focus assistance on innovation and economic growth.