Draft laws to be put to EU competitivity test

The European commissioner for industry and entrepreneurship to present proposal next week.

European Union laws should be tested for their effect on European industry’s ability to compete economically with the rest of the world, the European Commission will say, in a move that could sharpen conflicts over environment and climate laws.

All policy proposals that would have a big impact on industry, from financial regulation to new climate and environment laws, would face a “competitiveness proofing” on top of the existing requirement for an impact assessment. Officials would have to report on a law’s likely implications for costs, prices, investment and innovation. Existing laws would also undergo “fitness checks” to test their effects on competitiveness and the risk of “excessive burdens” on industry.

Antonio Tajani, the European commissioner for industry and entrepreneurship, will outline these ideas on Thursday (28 October) when he presents a paper on EU industrial policy. The paper is the third in what are billed as the “flagship initiatives” of the Europe 2020 plan for growth and jobs, following earlier efforts on innovation and young people. Further details on the “competitiveness proofing” and post-legislation “fitness checks” will follow in 2011.

The Commission will insist that its industry policy is not a traditional “subsidies and protectionism” plan. Instead, by attempting to make industry more central to transport, energy, environment, social and consumer protection policies, the Commission hopes to ensure that the EU keeps a strong industrial base in the face of fierce competition from emerging powers.

A draft seen by European Voice is upbeat about how European industry is weathering the threat of competition from China, India and Brazil, and seeks to challenge the perception that in the past few decades Europe has been “moving towards a growth model without traditional industries”.

The Commission is already required to carry out impact assessments weighing the costs and benefits of all major proposals for legislation and any initiatives (eg, white papers) that set future policies.

Tajani’s paper comes as the EU debates how to implement its climate-change ambitions, such as whether to increase its greenhouse-gas reductions pledge to 30%, and refines rules to toughen up Europe’s emissions trading system.

Folker Franz at BusinessEurope, the employers’ association, said he hoped that a paper drawn up by the enterprise directorate-general would ensure that all commissioners gave industry due weight: “We are not keen on a long list of initiatives…the most important thing is that DG Enterprise triggers a change of mindset in the whole college of commissioners.”

“It is a question of perspective whether the Commission is giving enough attention to industry or not. We think not,” he said.

Paul de Clerck of the environmental campaign group Friends of the Earth voiced concern that the new checks might be used to stop environment legislation.  “As part of the Better Regulation agenda, the Commission has done this already. There is a sufficient process in place. Making yet another competitiveness impact assessment is designed to stop any environment or climate policy.”

Carl Schlyter, a Swedish Green MEP and a vice-chair of the Parliament’s environment committee, said legislators were always fully informed by lobbyists of the costs of any action to industry. “Nobody here would be unaware when there is a cost to industry,” he said, adding that the Commission’s idea showed “old-fashioned” thinking that would “increase bureaucracy and cowardliness in decision-making”.

He said: “We don’t know how our policies affect future generations, how they affect health and how they affect development. And those are the real questions we should be asking ourselves.”

Tajani will ask governments to undertake similar competitiveness checks on national legislation, but these will not be compulsory.

Other elements of the Tajani paper have long been on the EU’s wish-list, from agreeing an EU patent regime to further liberalisation of energy markets.