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To improve their competitiveness as part of a concerted effort, member states should apply robust and coordinated industrial and SME policies in line with their participation in the euro and the internal market. It is urgent to take this step because Europe needs to restore growth without delay in order to exit the crisis. This is the message reiterated by the European Commission in its communication of 14 October, Industrial policy: Reinforcing competitiveness'. To support this effort, the executive is ready to "promote and monitor structural improvements".

Discussing member states' performance in terms of industrial competitiveness, the Commissioner for Industry and Competitiveness, Antonio Tajani, commented: "European industry is in good shape and ready to compete. However, the slowdown of the recovery should push us to put even further competitiveness and growth at the top of the political agenda. We need structural reforms aimed at freeing the potential of our entrepreneurs, the main actors for recovery".

The communication is accompanied by the 2011 report on European competitiveness and the 2011 report on member states' competitiveness performance. According to these reports, economic recovery is relatively slow in the EU and remains fragile. This situation is reflected in the worsening sentiment across the European economy. There are also clear downside risks stemming from financial markets, rising energy and raw materials prices, and the need for budgetary consolidation. Significant gaps exist between member states: average labour productivity in manufacturing (calculated as percentage of gross added value per person employed) ranges from nearly 125% in Ireland to less than 20% in Bulgaria. The share of innovative companies varies from 80% in Germany to 25% in Latvia. Finland's legislation is the most business-friendly, while Italy's ranks last for this indicator.

These reports will contribute to the evaluation of member states' performance in the broader framework of the European semester and the Europe 2020' strategy.


The communication identifies a number of key areas where the competitiveness of the European economy should be reinforced to progress towards the 2020 goals:

- facilitating structural changes in the economy in order to move towards more innovative and knowledge-based sectors (eg eco-industries, electrical and optical equipment)

- enabling innovation in industries by pooling scarce resources, reducing the fragmentation of innovation support systems and improving the market focus of research projects. The markets for key enabling technologies (eg nanotechnologies, advanced materials or industrial biotechnology) are expected to grow by up to 50% by 2015

- encouraging sustainability and resource efficiency, particularly by promoting innovation and the use of cleaner technologies, guaranteeing fair access and undistorted pricing of raw materials and energy, and upgrading and interconnecting energy distribution networks

- improving the business environment, especially by easing the administrative burden and encouraging competition between service providers that use broadband, energy and transport infrastructure

- fully implementing single market legislation, in particular the Services Directive

- supporting SMEs, in particular by favouring access to finance, facilitating internationalisation and access to markets and reducing payment times by public administrations.

The communication and reports are available > Search = 301556
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Publication:Europe Environment
Date:Oct 27, 2011

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