The EU has long been known as a good place for competitive companies, legal certainty, a strong single market and access to global markets. However, current economic figures clearly show that the European model for success is in danger and the competitiveness of European industry is at risk of faltering.
Holger Kunze is the Head of the VDMA European Office.
Master plan for European industry
This is where the VDMA comes in with its position paper on the legislative period 2024-2029 and calls on the EU to focus on key priorities. Europe must urgently become an attractive and competitive location for production and innovation again. “Less regulation, more freedom for companies” should always be the motto.
In the next legislative cycle, the EU’s objective must be to become the world’s leading place for the development and manufacturing of clean, advanced and competitive technologies and products – to supply Europe, but also to enable clean solutions around the world.
To achieve this, the next EU institutions must pursue four priorities:
Manufacturing matters: The EU must make manufacturing a key political priority to again become an attractive and competitive location for factories and manufacturing innovation.
Making the EU’s legislation an innovation driver: The EU’s legislative framework must be substantially overhauled, converting it from the burden it has become into a competitive advantage by following the “better regulation” principles such as proportionality, subsidiarity, and technological neutrality for all new legislation.
Regain leadership in research and innovation: To stay globally competitive and to develop the enabling technologies needed for sustainability, the EU must lead in research and innovation, stepping up its ambition to reach the 3% target for R&I-intensity.
Allowing entrepreneurs to thrive: The EU’s industrial policy must be based upon market economy, freedom of entrepreneurship and competition rules. Intervention in markets and business decisions must be the exception.
Deepening the European single market
The European machinery and equipment manufacturing industry has benefited from the EU Single Market more than almost any other sector. Many medium-sized machinery manufacturing companies have succeeded in scaling up their activities in Europe. Europe has not only become these companies‘ undisputed home market but has also served as a springboard to markets in other parts of the world. Strengthening and deepening the EU Single Market, including its digital, energy and capital markets, must become one of the EU‘s top priorities in the coming years. This is the only way to maintain the competitiveness of European industry in general and European machinery manufacturers in particular, in a world characterised by geopolitical upheaval.
The European Commission must present a far-reaching masterplan which creates a Single Market in services, removes barriers in circular economy, strengthens the New Legislative Framework and the European standardisation system and enforces Single Market legislation effectively in the entire EU.
Driving forward free trade
In addition to a strong internal market, free trade is a basic prerequisite for companies to be able to operate successfully. Small and medium-sized enterprises in particular are dependent on free markets. The EU must make an even greater effort in this area and finally conclude ongoing negotiations, ratify existing agreements and make them a reality.
A key reason for the stalled negotiations with many countries is, in our view, the EU‘s demands on non-trade issues. From environmental standards to social requirements and the threat of sanctions, there is a tendency for the EU to overload trade agreements with topics that are not directly related to trade. This overburdens many of the potential partners and they become unwilling to make the required commitments. As a result, third countries such as China that offer themselves as easier trading partners benefit from the hurdles that the EU erects. This cannot be in the interest of the EU.
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