ETUC urges Competitiveness Council to address the challenges of European Industry

Brussels, 17/05/2004

‘The fierce competition that European industry is facing is real and should not be underestimated. Simple recipes such as unrestrained competition and getting rid of rules and regulation will only lead to lower standards and will not do the job. Europe needs a real industrial policy', states John Monks, General Secretary of the ETUC.

The ETUC expresses several concerns on the Commission Communications on industrial policy and competition policy, which the Competitiveness Council will discuss on 17th and 18th May:

- Competition will only lead to innovation, productivity and high quality of goods and services if it is guided in the right direction. Without a level playing field underpinning competition, market forces will lead to firms competing on the basis of low quality, low prices and bad and low-paid jobs. The genuine problems of European industry should not be abused by pushing through the agenda of deregulation of the services market and the liberalisation of the remaining utility sectors. It is not states and regulatory systems that should compete amongst each other, but rather the companies that should compete with governments setting the limits of competition on the basis of democratic principles.

- Likewise, making the issue of competitiveness the overriding pillar outweighing the goals of social protection and sustainable development in European decision-making is a narrow and shortsighted strategy, which is deemed to fail in the long run.

- In contrast with the Communication on industrial policy, which (rightly so) underlines the need for investing in human capital, for example by sectorial training funds, the Communication on competition policy states that it will carefully monitor and scrutinize collective agreements that set up schemes to train workers. This is especially regrettable since those training schemes that are established through these collective agreements benefit workers that otherwise would not have access to training.
The ETUC calls upon the Competitiveness Council to make a statement stipulating that these agreements should be excluded from the field of competition policy and should instead be promoted by the European Social Fund.

Other aspects of the Communication are welcomed and supported by the ETUC:

- The recognition of the positive role that social dialogue can play in addressing structural change. This, however, should not remain limited to general statements. Instead, social partners should be involved in the sectorial discussions on the restructuring of industries.·

- The role that public procurement can play in developing new technologies and new markets (notably developing the dimension of sustainable development) that may give Europe's economy a competitive edge in the global economy of tomorrow.

Finally, crucial aspects are still missing for the ETUC:

- Structural change can only work if Europe gets its macroeconomic household in order. The process simply does not work when workers who are being made redundant cannot find jobs because aggregate demand in the domestic economy is depressed and neglected by macroeconomic policy-makers that are fighting the inflationary battles of the past.

- Another forgotten dimension is the introduction of high performance work places and innovation through an adequately regulated labour market that guarantees workers' participation, security and training. It is no coincidence that Germany, with its system of co-determination for workers has the highest share in Europe of companies that engage in innovation. (Over the period 1998 - 2000, 65% of German companies engaged in innovative activities against 45% for the EU-15 and only 30% in the ‘red tape free' UK- economy, figures from Eurostat).

- Ending tax competition on mobile incomes such as capital, savings and energy taxes would provide governments with a financial basis for highly needed investments in research and development and shaping those activities that are the future dynamic sectors (clean technologies, renewable energy).

17.05.2004
Press release