More competitiveness, resilience and sovereignty for the EU (cepAdhoc)
The EU is under pressure both geopolitically and in terms of its industrial policy, and is in danger of being left behind by the USA and China. Last week, therefore, the Commission presented three draft laws and a communication which aim to strengthen European sovereignty, competitiveness and resilience. The Centrum für Europäische Politik (cep) finds the proposals fragmented and overly bureaucratic.
"In strategic terms, the Commission is on the defensive and getting bogged down in fragmented legislation that will force it to take sometimes protectionist actions. Its high-profile response to the IRA, which the USA is using to attract investment in green technologies, could thus quickly turn out to be a nonstarter," says cep’s CEO, Henning Vöpel, who has examined the draft bills, together with cep experts Götz Reichert, Matthias Kullas and André Wolf.
The Net-Zero Industry Act provides for at least 40% of green technologies to be produced in the EU. The Critical Raw Materials Act is seeking to boost mining and the circular economy in the area of critical raw materials. The reform of the EU electricity market aims to protect companies from price spikes and promote investment in low-carbon electricity. Brussels also wants to increase competitiveness by improving access to capital and developing infrastructure.
The cep researchers warn against unrealistic targets and major intervention in the 30-year-old internal market. "It would make more sense to come up with a strategy based on common interests: technological leadership as well as measures to strengthen security of supply, the industrial base and innovation skills," urges Kullas. The EU needs to put more focus on its own strengths. It is illogical to want to reduce bureaucracy and then create even more of it with the draft legislation. According to Wolf, when it comes to critical raw materials, Europe has no real strategy for establishing new resource partnerships and securing them for the long term. Reichert calls for affordable electricity prices for industry, and planning security for investors in renewable energies.