"High energy prices and the U.S. Inflation Reduction Act have led the EU to finally return its attention to the international competitiveness of European industry. However, the debate about the attractiveness of Europe as an industrial location must not be limited to somehow mirroring the subsidies promised by the U.S. Inflation Reduction Act in Europe. Rather, a European industrial policy which, among other things, has the goal of a comprehensive climate-oriented transformation and has to activate considerable investments to achieve this, must above all focus on shaping the framework conditions. This includes reliable permitting and funding procedures, innovation-friendly regulation, a competitive tax system, excellent infrastructure, the conclusion of free trade agreements and access to raw materials. It is good that the EU Commission wants to address some of these points.

It will be important that not only some  products and sectors benefit from better conditions in the short term, but that Europe becomes a good location for ecologically and economically sustainable value chains across the board. To achieve this, technology neutrality must be the guiding principle for political action. Factories for a few, politically selected end products alone will not advance the transformation to a sustainable economy if there is a lack of labor, machinery, components and affordable energy. On the contrary, there is a risk that many companies contributing to climate neutrality will be excluded or even disadvantaged.

VDMA is therefore calling for the scope for competition and innovation to be expanded for all companies in the design of the industrial plan and for unnecessary regulatory barriers to be removed. Innovation can only come about through competition.”
 

A photo of Thilo Brodtmann, VDMA Executive Director can be found here