German chemical industry opposes EU 2020 strategy

10 February 2010 19:32  [Source: ICIS news]

TORONTO (ICIS news)--Germany’s chemical industry is worried that the European Commission’s “EU 2020 strategy” could tilt the 27-member union too much to industrial policies at the expense of free markets and economic growth, a trade group said on Wednesday.

The EU 2020 strategy – designed as successor to the Lisbon strategy – sets out proposed policies the EU should pursue in the coming 10 years to create a sustainable social market economy, as well as a smarter and greener economy, by 2020.

However, Germany's chemical employers group BAVC said that the commission seemed to be in a hurry to push through a strategy that left much to be desired.

In a joint response with the country's chemical producers association VCI, the two trade groups said many of the EU’s proposed policy measures were marked by a “deep suspicion” of the role competitive markets play in achieving innovation and transformation.

In order to create a “green economy”, the commission wanted to build up new industries and modernise existing industries through a range of regulations and other instruments - including taxation, subsidies, emissions trading and public investment, they said.

However, such “selective industrial policies” were doomed to fail, the groups said.

The commission had no way of knowing or identifying which markets or industries would eventually succeed or fail, they said.

“The state is not a better entrepreneur than private companies,” they said.

At the same time, the groups warned the commission not to separate industries into “green” and “non-green” sectors.

Energy intensive sectors such as basic chemicals or steel were contributing towards “green” objectives just as much as producers of renewable energies, they said.

A policy that bet on selected industries or sectors to achieve environmental transformation would therefore not succeed, they said.

Going forward, the biggest challenge for the EU was to achieve economic growth to get European economies out of the current crisis, the groups said.

Economic growth would provide companies and countries with the means to invest in necessary research, education and sustainable technologies and projects. Any EU strategy for the coming years needed to take this basic fact into account, they said.

The two German associations also noted that the commission's “high level group” on chemical industry competitiveness last year had identified chemical producers as trailblazers in creating a sustainable future economy.

However, the commission’s EU 2020 strategy went in the opposite direction of that group’s findings as it threatened to undercut the chemical industry’s ability to successfully innovate, they said.

“We fear that energy-intensive producers will face ever higher burdens and that his could jeopardise European industry competitiveness,” they added.

In a separate statement, BAVC also said that the EU’s Lisbon strategy had failed in its aim to turn the EU into the world’s most competitive and dynamic science-based economic region by 2010, a failure had been clear even before the economic crisis.

Instead, the EU had actually fallen behind other regions and may soon struggle to keep up with the rapid development in countries such as China, India or Brazil, the Wiesbaden-based group said.

BAVC’s and VCI’s joint response is available, in German language, on VCI’s website. Details about the EU 2020 strategy are available on the commission’s website.

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By: Stefan Baumgarten
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