News
BackOn 25.9.2013, the Commission published its Competitiveness Report, which measures the competitiveness of the Member States based on certain criteria and shows areas, in which, from the point of view of the Commission, taking measures is required. The Report, which was drawn up by the Directorate-General for Enterprise and Industry, emphasizes significantly different features compared to the neoliberal concepts, which in particular emerge from the Directorate-General for Economics and Financial Affairs on a regular basis. According to this Report, Austria’s performance too is above average, and this not in spite of the strong Austrian welfare state, but because of it.
Europe’s re-industrialisation
The study by the Commission reaches the clear conclusion that countries with a strong industrial basis emerged from the crisis in far better shape than others. It is therefore important to expand the industrial sector in Europe again and to increase the share of the producing trade once again to 20 % of the EU’s GDP. From the Commission’s point of view, the biggest problems to achieve this are the companies’ reluctance to invest, enterprises still finding it difficult to access financial markets, high energy prices and the lack of efficiency shown by public administrations.
To expand the industrial sector, the Commission above all proposes the promotion of export (by liberalising third country markets and the single market), investments in research and development (R&D), as well as improvements in training workers.
The approach of the Commission, not only to create jobs in the European services sector, but also to strengthen the producing trade, has to be welcomed. It is also positive that the Directorate-General for Enterprise and Industry of the European Commission does not regard trade unions and labour rights as the greatest stumbling blocks for the competitiveness of a country, but a lack of education and training; hence, it therefore demands more investments in R&D. However, some critical aspects must also be pointed out. Opening markets to third countries and removing hurdles in the Internal Market may prove problematic if this means that for example labour rights or environmental standards will be undermined. A reduction of energy costs is also only to be welcomed if this is neither achieved at the expense of private households (by them cross-financing low energy prices for enterprises) nor of the environment, because energy sources (such as fracking) are tapped into, which might have disastrous consequences for mankind and the environment. More importantly, in particular here, efficiency increases are driven by innovation. In the end, it also becomes clear that aspects exist, which are not directly associated with industrial policy. Whether enterprises have access to external financing, is above all dependent on whether one will at last succeed in sustainably overcoming the crisis of the banking sector by imposing the right measures (e.g. orderly resolution of failed banks without the taxpayer having to foot the bill, separating private banking and speculative trading).
Austria
The report is very positive from an Austrian point of view. With above average productivity and a share of the producing trade of almost 19 % (without the construction sector), Austria is significantly above EU average. The Commission also rates the measures taken to increase R&D expenditure as positive and praises the importance of the public sector for Austria’s economic strength, for example by stating in the Report of the Commission in respect of Austria: “Austria’s overall public administration performance, as assessed by the World Bank’s government effectiveness indicator, is well above the EU average. Perceived quality of public services, including quality of the civil service and policy implementation in Austria, is high.”
Positive from the point of view of all those, who want to achieve this goal by strengthening the Austrian economy not by extending working hours and softening social rights, but on the basis of more justice and fairness, are also the Commission’s education policy recommendations. The Commission does not only see deficits in making use of migrants’ qualifications, but explicitly criticises that school children have to make a decision regarding their future education at a far too early stage.
Conclusion
Overall, the Report provides a good overview about the strengths and weaknesses of European economies. In spite of some weaknesses, the strategy for re-industrialisation is certainly an important contribution. However, one fact is clear and the Commission has to realise this: there cannot be any sustainable recovery of the industry with decent wages for all employees if the current European austerity policy is allowed to persist.
Further information:
Competitiveness
Specific section of the Report on Austria
The study by the Commission reaches the clear conclusion that countries with a strong industrial basis emerged from the crisis in far better shape than others. It is therefore important to expand the industrial sector in Europe again and to increase the share of the producing trade once again to 20 % of the EU’s GDP. From the Commission’s point of view, the biggest problems to achieve this are the companies’ reluctance to invest, enterprises still finding it difficult to access financial markets, high energy prices and the lack of efficiency shown by public administrations.
To expand the industrial sector, the Commission above all proposes the promotion of export (by liberalising third country markets and the single market), investments in research and development (R&D), as well as improvements in training workers.
The approach of the Commission, not only to create jobs in the European services sector, but also to strengthen the producing trade, has to be welcomed. It is also positive that the Directorate-General for Enterprise and Industry of the European Commission does not regard trade unions and labour rights as the greatest stumbling blocks for the competitiveness of a country, but a lack of education and training; hence, it therefore demands more investments in R&D. However, some critical aspects must also be pointed out. Opening markets to third countries and removing hurdles in the Internal Market may prove problematic if this means that for example labour rights or environmental standards will be undermined. A reduction of energy costs is also only to be welcomed if this is neither achieved at the expense of private households (by them cross-financing low energy prices for enterprises) nor of the environment, because energy sources (such as fracking) are tapped into, which might have disastrous consequences for mankind and the environment. More importantly, in particular here, efficiency increases are driven by innovation. In the end, it also becomes clear that aspects exist, which are not directly associated with industrial policy. Whether enterprises have access to external financing, is above all dependent on whether one will at last succeed in sustainably overcoming the crisis of the banking sector by imposing the right measures (e.g. orderly resolution of failed banks without the taxpayer having to foot the bill, separating private banking and speculative trading).
Austria
The report is very positive from an Austrian point of view. With above average productivity and a share of the producing trade of almost 19 % (without the construction sector), Austria is significantly above EU average. The Commission also rates the measures taken to increase R&D expenditure as positive and praises the importance of the public sector for Austria’s economic strength, for example by stating in the Report of the Commission in respect of Austria: “Austria’s overall public administration performance, as assessed by the World Bank’s government effectiveness indicator, is well above the EU average. Perceived quality of public services, including quality of the civil service and policy implementation in Austria, is high.”
Positive from the point of view of all those, who want to achieve this goal by strengthening the Austrian economy not by extending working hours and softening social rights, but on the basis of more justice and fairness, are also the Commission’s education policy recommendations. The Commission does not only see deficits in making use of migrants’ qualifications, but explicitly criticises that school children have to make a decision regarding their future education at a far too early stage.
Conclusion
Overall, the Report provides a good overview about the strengths and weaknesses of European economies. In spite of some weaknesses, the strategy for re-industrialisation is certainly an important contribution. However, one fact is clear and the Commission has to realise this: there cannot be any sustainable recovery of the industry with decent wages for all employees if the current European austerity policy is allowed to persist.
Further information:
Competitiveness
Specific section of the Report on Austria