Industrial policy

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Policy for a competitive industry

For this reason, the principal objective of industrial policy is to establish the conditions that maintain the industrial sector's competitiveness and increase its potential for growth, employment and innovation.

Nevertheless, there are situations in which additional state activity is necessary and useful. For example, without public assistance, industry in the new (eastern) Federal States would have rapidly collapsed after economic and monetary union. This is because so many companies were uncompetitive. A broad range of supportive policies, which above all encouraged greater investment in eastern Germany, facilitated the transformation from an inefficient planned economy to a competitive market economy. In particular, the preservation of industrial core areas helped to ensure that the new Federal States maintained an industry-based economic structure.

As part of its overall industrial policy, the German Government holds talks with various branches of industry and social partners to identify problem areas and to work out joint solutions. In addition, through its State Secretaries, the Ministry of Economics and Technology engages in close coordination with strategic industrial sectors such as the aerospace and maritime industries.

For a number of years now, the institutions of the European Union have had a strong influence on the legal framework affecting the industrial sector. The EU's Competitiveness Council serves a key function in this connection by ensuring that the justified concerns of companies are incorporated into EU decision-making processes. In the coming years, one of the top priorities will be to formulate a sustainable industrial policy that will help the EU achieve its ambitious environmental and climate protection targets while simultaneously maintaining the competitiveness of European industry.

The EU's sector-specific initiatives form a key element of European industrial policy. In these initiatives, the European Commission and the Member States join forces with industry, employee representatives and civil society actors to conduct a comprehensive assessment of a specific industrial sector and use this assessment to formulate a future-oriented strategy for that sector. The aim is not to create expensive funding programmes or enact protectionist measures but rather to align general economic conditions more effectively with the needs of companies in that sector. The most prominent example is the multi-stakeholder "CARS 21" group targeting the automotive industry. This group has formulated proposals for reducing the CO2 emissions of road traffic in order to ensure the long-term viability of European automotive industries.