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A pivotal item on the agenda of the French Presidency of the Council of the European Union will be to strengthen European independence and the strategic autonomy of our industries. In Paris on Thursday 13 January 2022, the Ministry for the Economy, Finance and the Recovery will be hosting the ministerial conference “Stronger industry for a more independent Europe” to take stock of what is on the line and prepare the next steps in this area.
Amid rising global tensions, it has become clear that the European Union must move to reduce its dependence on external supply chains for critical and essential goods, as they cannot be relied on in the event of a geopolitical crisis or a major economic shock.
In its May 2021 Industrial Strategy update, the European Commission identified 137 products in 14 sensitive industrial ecosystems for which the EU is highly dependent on foreign sources including electronics, aerospace, automotive and energy-intensive industries.
The COVID-19 crisis, and resulting shortages of raw materials, have also made structural weaknesses in value chains more readily apparent:
Risk of supply shortages of essential health products (face masks, essential medicines like paracetamol);
Inadequate availability of products needed to keep our industries running smoothly, such as certain critical raw materials (lithium, copper, cobalt, magnesium) and semi-conductors, which poses manufacturing challenges and lengthens delivery times for consumers.
Since 2019, the EU started to strengthen its strategic autonomy and increase the resilience of European industry, without sacrificing its open economy.
The French Presidency will be highly involved in furthering these initiatives by:
Implementing fairer regulations for European industry: finalising ongoing negotiations regarding proposed regulations on (i) the International Procurement Instrument (IPI), which will ensure greater reciprocal access to public procurement contracts, and (ii) foreign subsidies distorting the single market;
Creating new EU-wide prevention and rapid crisis response tools, such as the forthcoming European Health Emergency Preparedness and Response Authority (HERA);
Gaining a more complete understanding of EU strategic dependencies and vulnerabilities: the European Commission will provide additional analysis on these topics during the French Presidency so as to round out its report on the risks looming over 14 industries – spanning aerospace, defence, electronics and renewable energy – that are essential to the EU’s future.
To meet the greatest industrial challenges, strengthen the EU’s strategic autonomy and make Europe a more innovative and greener place, the Union is harnessing a European initiative focused on industrial cooperation: Important Projects of Common European Interest (IPCEI). In 2019, under the impetus of France and Germany, the EU undertook to create IPCEIs centred on two sectors: microelectronics and batteries.
The next steps involve fast tracking ongoing work and finalising, in 2022, four new cooperation initiatives in strategic sectors such as microelectronics/connected technology, hydrogen, health, and cloud technologies.
This conference presents a prime opportunity to consider resources that can be used and action plans that can be devised to help the EU strengthen its strategic autonomy.
The work, produced by the conference, will fuel discussions between EU ministers responsible for Industry, who will meet to address these topics during the Informal Meeting of Ministers for Industry and for the Internal Market in Lens, France, on 31 January and 1 February 2022.
The first roundtable will examine Europe’s strategic vision and vulnerabilities, while the second will consider what action needs to be taken to secure EU supply of critical raw materials. Lastly, the third roundtable will look at the tools, including IPCEIs, and financing that could be effectively marshalled or created to bolster the EU’s most critical sectors.
