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Updating the 2020 Industrial Strategy: Towards a stronger Single Market for Europe’s recovery

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The Commission has updated the EU Industrial Strategy to ensure that its industrial ambition takes full account of the new circumstances following the COVID-19 crisis and helps to drive the transformation to a more sustainable, digital, resilient and globally competitive economy.

The updated Strategy reaffirms the priorities set out in the March 2020 Communication, published the day before the WHO declared COVID-19 a pandemic, while responding to the lessons learned from the crisis to boost the recovery and enhance the EU’s open strategic autonomy. It proposes new measures to strengthen the resilience of our Single Market, especially in times of crisis. It addresses the need to better understand our dependencies in key strategic areas and presents a toolbox to address them. It offers new measures to accelerate the green and digital transitions. The updated Strategy also responds to calls to identify and monitor the main indicators of the competitiveness of the EU economy as a whole: single market integration, productivity growth, international competitiveness, public and private investment and R&D investment.

The SME dimension is at the core of the updated Strategy with tailored financial support and measures to enable SMEs and start-ups to embrace the twin transitions. The Commission intends to appoint Vazil Hudák as the SME Envoy. His appointment is currently being finalised.

The Commission has also adopted the proposal for a Regulation on foreign subsidies distorting the Single Market. It is a key element to deliver on the EU Industrial Strategy by ensuring a level playing field and by promoting a fair and competitive Single Market.

The updated Industrial Strategy published today focuses on the following key areas:

Strengthening Single Market resilience

The Single Market has been severely tested by supply restrictions, border closures and fragmentation following the COVID-19 outbreak. The crisis highlighted the essential need to uphold the free movement of persons, goods, services and capital in the Single Market and the need to work together to strengthen its resilience to disruptions. To this purpose, the Commission will, among others:

  • Propose a Single Market Emergency Instrument – a structural solution to ensure the free movement of persons, goods and services in case of future crises. It should guarantee more transparency and solidarity, and help address critical product shortages by speeding up product availability and reinforcing public procurement cooperation;
  • Fully enforce the Services Directive to ensure that Member States comply with their existing obligations, including the notification obligation in order to identify and eliminate new potential barriers;
  • Strengthen market surveillance of products by supporting national authorities to increase capacity and step up the digitalisation of product inspections and data collection;
  • Mobilise significant investment to support SMEs; design and implement Alternative Dispute Resolution schemes to address payments delays to SMEs and provide measures to address solvency risks affecting SMEs.

Dealing with the EU’s strategic dependencies

Openness to trade and investment is a strength and source of growth and resilience for the EU, which is a major importer and exporter. Yet the pandemic also triggered wider awareness of the need to analyse and address strategic dependencies, both technological and industrial. The Commission therefore:

  • Carried out a ‘bottom-up’ analysis based on trade data: out of 5,200 products imported in the EU, an initial analysis identifies 137 products (representing 6% of the value of the EU’s total import value of goods) in sensitive ecosystems for which the EU is highly dependent – mainly in the energy intensive industries (such as raw materials) and health ecosystems (such as pharmaceutical ingredients) as well as concerning other products relevant to support the green and digital transformations. 34 products (representing 0.6% of the EU’s total import value of goods) are potentially more vulnerable given their possibly low potential for further diversification and substitution with EU production. The analysis also shows challenges and dependencies in the area of advanced technologies;
  • Presents the results of six in-depth reviews on raw materials, batteries, active pharmaceutical ingredients, hydrogen, semiconductors and cloud and edge technologies, providing further insights on the origin of strategic dependencies and their impact;
  • Will launch a second stage of reviews of potential dependencies in key areas, including products, services or technologies key to the twin transitions, such as renewables, energy storage and cybersecurity, and develop a monitoring system through the Commission’s Observatory of Critical Technologies;
  • Works towards diversifying international supply chains and pursuing international partnerships to increase preparedness;
  • Supports new industrial alliances in strategic areas where such alliances are the best tool to accelerate activities that would not develop otherwise. Industrial alliances will be supported where they attract private investors to discuss new business partnerships and models in an open, transparent and competition-compliant manner, and have a potential for innovation and high-value job creation. Alliances provide a platform that is broad and open in principle, and will pay particular attention to inclusiveness for start-ups and SMEs.
  • The Commission is preparing the launch of the Alliance on processors and semiconductor technologies and the Alliance for Industrial Data, Edge and Cloud; and considering the preparation of an Alliance on Space Launchers as well as an on Zero Emission Aviation;
  • Supports Member States’ efforts to pool public resources via Important Projects of Common European Interest (IPCEIs) in areas where the market alone cannot deliver breakthrough innovation, with possible support from the EU budget;
  • Announces a strategy and possible legislative change for more leadership in standard-setting, including in the area of business services, while working openly with others on areas of mutual interest.

Accelerating the twin transitions

The 2020 Industrial Strategy announced actions to support the green and digital transitions of EU industry, but the pandemic has drastically affected the speed and scale of this transformation. Therefore, the Commission outlines new measures to support the business case for the green and digital transitions, by:

  • Co-creating transition pathways in partnership with industry, public authorities, social partners and other stakeholders, where needed, starting with tourism and energy intensive industries. Such pathways could offer a better bottom-up understanding of the scale, cost and conditions of the required action to accompany the twin transitions for the most relevant ecosystems leading to an actionable plan in favour of sustainable competitiveness;
  • Providing a coherent regulatory framework to achieve the objectives of Europe’s Digital Decade and the ‘Fit for 55′ ambitions, including by accelerating the rollout of renewable energy sources and by ensuring access to abundant, affordable and decarbonised electricity;
  • Providing SMEs with Sustainability Advisors and supporting data-driven business models to make the most out of the green and digital transitions;
  • Investing to upskill and reskill to support the twin transitions.

The ongoing extensive review of the EU competition rules also makes sure that they are fit to support the green and digital transitions to the benefit of Europeans, at a time when the global competitive landscape is also fundamentally changing.

A Europe Fit for the Digital Age Executive Vice President Margrethe Vestager said: “Today’s updated Industrial Strategy is about making sure our industries are equipped to drive the digital and green transformations of our economy while ensuring the competitiveness of our industries, also in the context of the recovery from the coronavirus crisis. This requires new investments now – in people, in technologies and in the right regulatory framework that guarantees fairness and efficiency. By supporting and extending the scope of key tools already at our disposal, we are today presenting our lessons learnt and reaffirming our commitment to work together with all economic actors from across Europe.”

An Economy that Works for People Executive Vice President Valdis Dombrovskis said: “Resilient global supply chains are essential in times of crisis as they help absorb shocks and speed up recovery. As we emerge from the COVID-19 pandemic, our updated Industrial Strategy aims to leverage Europe’s position as a global industrial leader in order to provide a competitive edge in digital and green technologies. We will seek cooperation with likeminded partners wherever we can to support open, fair and rules-based trade; reduce strategic dependencies; and develop future standards and regulations: all of which are critical for our economic strength. At the same time, we stand ready to act autonomously whenever we must to defend ourselves against unfair practices and protect the integrity of the Single Market.”

Internal Market Commissioner Commissioner Thierry Breton said: “The real industrial revolution is starting now – provided we make the right investments in key technologies and set the right framework conditions. Europe is giving itself the means for an innovative, clean, resilient industry which provides quality jobs and allows its SMEs to thrive even during the recovery process.”

Background

The update of the 2020 Industrial Strategy was announced by President von der Leyen during the State of the European Union of September 2020. Today’s Communication also responds to the call of EU leaders to pursue an ambitious European industrial policy to make its industry more sustainable, more green, more competitive globally and more resilient. The EU leaders also invited the Commission to identify strategic dependencies, particularly in the most sensitive industrial ecosystems such as for health, and to propose measures to reduce these dependencies.

Today’s (6 May) Communication is accompanied by three Staff working Documents: Annual Single Market Report 2021 analysing the state of play of the European economy based on an assessment of 14 industrial ecosystems, evaluating the progress made in delivering the 2020 Industrial Package and presenting a set of key performance indicators to monitor further progress; an analysis on Europe’s strategic dependencies and capacities with an in-depth review in a number of strategic areas; and a paper on competitive and clean European steel analysing the challenges for the industry and the EU Toolbox available.

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EU

7th EU-Kazakhstan High-Level Business Platform focused on transition to low-carbon and green technologies

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The EU-Kazakhstan High-Level Platform of dialogue on economic and business matters (Business Platform) held its 7th meeting in Nur-Sultan on 11 June, chaired by Prime Minister Askar Mamin.

The event brought together representatives of business and EU Heads of Mission led by the Ambassador of the EU to the Republic of Kazakhstan, Sven-Olov Carlsson. Visiting EU Special Representative for Central Asia Ambassador Peter Burian joined the event.

The High-level Business Platform complements the technical dialogue between the EU and Kazakhstan within the Enhanced Partnership and Cooperation Agreement, in particular the Cooperation Committee in Trade Configuration, which took place in October 2020.  

The EU has committed to climate neutrality by 2050 and is fully translating the implementation of the Paris Agreement into legislation. Ambitious targets and decisive actions demonstrate that EU is and will remain to be a global leader in the transition to green economy. The climate challenge is inherently global, the EU is only responsibly for approximately 10% of all global Greenhouse Gas emissions. The EU expects from its partners to share a comparable level of ambition to fight climate change and is ready to deepen co-operation with Kazakhstan in this area, including exploring new opportunities for trade and investment.

The recent EU-Kazakhstan Cooperation Council welcomed the progress made in the framework of the Business Platform chaired by the Prime Minister Mamin. The Platform acknowledges the importance of the EU in Kazakhstan's external trade, and discussions on a range of issues contribute to attract more investment in Kazakhstan.

Background Information

The EU-Kazakhstan Enhanced Partnership and Cooperation Agreement (EPCA), fully in force from 1 March 2020, aims at creating a better regulatory environment for businesses in areas such as trade in services, establishment and operation of companies, capital movements, raw materials and energy, intellectual property rights. It is a tool of regulatory convergence between Kazakhstan and the EU, with some “WTO plus” provisions, notably on public procurement. Even in a year as difficult as 2020, the EU has consolidated its position as Kazakhstan’s first trade partner and first foreign investor, and Kazakhstan remains the main trade partner of the EU in Central Asia. Total EU-Kazakhstan trade reached €18.6 billion in 2020, with EU imports worth €12.6bn and EU exports €5.9bn. The EU is by far Kazakhstan's first trading partner overall, representing 41% of total Kazakh exports.

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Belgium

Iranian Opposition rally in front of US embassy in Brussels to ask US and EU for a firm policy towards Iranian regime

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Following the G7 summit in London, Brussels hosts the NATO summit with US and EU leaders. It is the first trip of President Joe Biden outside the US. Meanwhile, the Iran deal negotiations have started in Vienna and despite the international efforts to return Iran and the US to compliance with the JCPOA, Iranians regime showed no interest to return to its commitments under JCPOA context. In the recent IAEA report, important concerns have been raised that the Iranian regime failed to address.

The Iranian diaspora, supporters of the National Council of Resistance of Iran in Belgium, held a rally today (14 June) in front of the US embassy in Belgium. They held posters and banners with the picture of Maryam Rajavi, the leader of the Iranian opposition movement who has declared a non-nuclear Iran in her 10-point plan for the free and democratic Iran.

In their posters and slogans, Iranians asked the US and the EU to work harder to hold the mullahs’ regime accountable for its human rights violations too. The protesters emphasized the need for a decisive policy by the US and the European countries to harness the mullahs’ quest for a nuclear bomb, stepped up repression at home, and terrorist activities abroad.

According to the new IAEA report, despite the previous agreement, the clerical regime refuses to answer IAEA questions on four disputed sites and (to kill time) has postponed further talks until after its presidential election. According to the report, the regime's enriched uranium reserves have reached 16 times the limit allowed in the nuclear deal. The production of 2.4 kg of 60% enriched uranium and about 62.8kg of 20% enriched uranium are of grave concern.

IAEA Director-General Rafael Grossi said: Despite agreed terms, “After many months, Iran has not provided the necessary explanation for the presence of the nuclear material particles…We are facing a country that has an advanced and ambitious nuclear program and is enriching Uranium very close to weapons-grade level.”

Grossi’s remarks, also reported by Reuters today, reiterated: “The lack of clarification of the agency’s questions regarding the accuracy and integrity of Iran’s Safeguard Declaration will seriously affect the agency’s ability to ensure the peaceful nature of Iran’s nuclear program.”

Maryam Rajavi (pictured), the President-elect of the National Council of Resistance of Iran (NCRI), said that the recent report of the International Atomic Energy Agency (IAEA) and the remarks by its Director-General once again show that to guarantee its survival, the clerical regime has not abandoned its atomic bomb project. It also shows that to buy time, the regime has continued its policy of secrecy to mislead the international community. At the same time, the regime is blackmailing its foreign interlocutors into lifting sanctions and ignoring its missile programs, export of terrorism, and criminal meddling in the region.

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Brexit

Ex-EU Brexit negotiator Barnier: UK reputation at stake in Brexit row

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Head of the Task Force for Relations with the UK, Michel Barnier attendsthe debate on EU-UK trade and cooperation agreement during the second day of a plenary session at the European Parliament in Brussels, Belgium April 27, 2021. Olivier Hoslet/Pool via REUTERS

Michel Barnier, the European Union's former Brexit negotiator, said on Monday (14 June) that the reputation of the United Kingdom was at stake regarding tensions over Brexit.

EU politicians have accused British Prime Minister Boris Johnson of not respecting engagements made regarding Brexit. Growing tensions between Britain and the EU threatened to overshadow the Group of Seven summit on Sunday, with London accusing France of "offensive" remarks that Northern Ireland was not part of the UK. Read more

"The United Kingdom needs to pay attention to its reputation," Barnier told France Info radio. "I want Mr Johnson to respect his signature," he added.

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