Valdis Dombrovskis Outlines EU Industrial Strategy at Hannover Forum
At a forum in Hannover, European Commission Executive Vice-President Valdis Dombrovskis underscored the critical role of industry for the EU's economy and detailed plans to boost its competitive edge. Dombrovskis stated that industry remains a cornerstone of the European economy, and building a stronger, more productive economy is not just an economic goal but a strategic necessity for the bloc's future.
“We know what needs to be done. The task is urgent, and the cost of inaction is too high.”
Valdis Dombrovskis
A key component of this strategy is the new Competitiveness Compass program, designed to cut regulatory burdens for businesses. This initiative is projected to save companies at least €15 billion per year. The EU's industrial sector contributes roughly 16% to its gross value added, a higher share than in the United States or the United Kingdom. Since the pandemic began, the sector has grown by about 7%, with high-tech industries like pharmaceuticals and electronics manufacturing seeing even stronger gains.
The European Commission's Action Plan
Currently, around 14% of the EU's workforce is employed in the industrial sector. Post-pandemic, employment in high-tech manufacturing has risen by 4.1%. In response, the European Commission is preparing measures to alleviate energy cost pressures, which include:
- proposals to reduce electricity taxes,
- modernizing energy grids,
- and improving the emissions trading system.
Furthermore, the EU is coordinating with member states on the use of strategic oil reserves and planning a structural economic transformation focused on renewable energy and electrification. A new Industrial Acceleration Act has also been approved to further advance the development of Europe's industrial sector. This push for industrial resilience comes as Europe faces significant headwinds, including the aftermath of the Covid-19 pandemic and ongoing energy market volatility.
Dombrovskis's address served as a crucial reminder of the need to bolster industry amid contemporary challenges, including the pandemic, Russia's full-scale war against Ukraine, and the energy shock. This speech is part of a broader EU strategy aimed at strengthening the bloc's economic position in a competitive global environment. With the world economy confronting numerous tests, from energy crises to geopolitical tensions, fostering innovation and industrial adaptation is more critical than ever for Europe's long-term stability and prosperity.
As the EU strives to bolster its industrial sector, it faces challenges similar to those experienced by Ukraine, where shifts in the economy have led to differing perspectives among employers and employees. Understanding these dynamics is crucial for comprehending the broader implications of economic reforms in Europe. To explore how these changes are affecting labor relations and economic priorities in Ukraine, read more about the evolving landscape here.