16 March 2009 14:27 [Source: ICIS news]
By Nigel Davis
LONDON (ICIS news)--Industrial policy is at a crossroads, the European Commission admits, and requires strong action. Not surprisingly then, ahead of a key meeting in
They want immediate assistance to help cope with the current economic crisis and further long-term policy support.
For the chemicals sector, this has been distilled down to a call for accelerated payment of VAT (value added tax) and tax credits for R&D, deferred registration payments on the expensive Reach chemicals control system and more efficient innovation funding.
These are issues that could have been worked out in the fullness of time but now need much more urgent attention.
“The economic crisis has had an unprecedented impact on
“SMEs in particular, already facing increased costs stemming from the implementation of Reach, are seriously affected,” it said in the joint industries statement.
The chemicals sector does not so much want support as an oiling of the wheels that drive European commerce. It is also seeking a more industry-friendly approach to Reach and the EU’s climate control plans enshrined in the Emissions Trading Scheme (ETS) and in worrisome Integrated Pollution Prevention and Control (IPPC) legislation proposals.
The proliferation of EU legislation would be an additional burden on companies struggling to cope with the credit crunch and the deep recession. It pushes harder the notion of smarter regulation from
Put into some perspective, chemicals production dropped by more than 15% in December. Output in January and February is likely to have been no better and was probably worse. EU chemicals output is expected to shrink by about 6% in 2009.
Companies need to better manage working capital in such difficult times but are facing an uphill battle. They could do with more VAT relief. It would also help, as Cefic points out, if public authorities (and others) paid their bills on time. The credit squeeze hurts and continues to strangle business
The great fear is that protectionism could surface within
Ahead of the G20 summit in April, European Commission president Jose Manuel Barroso was in
“We must tackle protectionism head on and make sure that we don’t risk a spiral of trade collapse through the protectionism that is obviously a possible reaction to this crisis,” Brown said. “We will be seeking agreement on rules and best practice and on a stimulus for trade around the world, a move from beggar-thy-neighbour policies to support-thy-neighbour policies.”
The world must go further in stimulating global demand, Brown added.
Barroso will open the industrial competitiveness meeting in
The event, according to the Commission, brings together European and national policy leaders to look at the ways ahead and to analyse the division of tasks between European and national policy bodies.
The EU faces not only the potential rise of protectionisms but also the lack of policy coordination and a more interventionist attitude from some member states.
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