II. BUILDING A COMPETITIVE EUROPE, BASED ON SOLIDARITY THAT CREATES JOBS
«There is strength in unity»: on the economic front, Europe should regain its added value and invent new projects for growth and employment. We need to invent the "Airbus" of tomorrow! It should in parallel achieve economic governance.
A. LAUNCHING NEW INITIATIVES FOR GROWTH AND EMPLOYMENT
The refounding of the European Union will only be sustainable if it is supported by a strong economy to create new jobs .
The "growth Europe" must be constructed on a number of strong pillars, of a strategic nature, which are also factors of the "powerful Europe". The digital and the energy sectors constitute two of these priority pillars both for the economy and for the sovereignty of the European countries.
As regards the competition policy, it should be redesigned so that it may be harnessed to the service of growth, investment and employment.
1. Enhancing the European digital sector
The adoption of the strategy for a single digital market in 2015 has enabled the European Union to equip itself with a number of tools for both taking part in the digital transformation of the world and to capitalise on it. This strategy is structured around three pillars . The first pillar is aimed at reinforcing the single European market by improving access to digital goods and services throughout Europe for consumers and companies. The second pillar aims to create a conducive environment and fair conditions of competition for the development of innovative digital networks and services. The objective of the third pillar is to maximise the growth potential of the digital economy.
The latter has yet to be completed. However, it is essential for the upturn in growth and employment in Europe. It involves the need to develop a European digital industry.
Two aspects are, in this respect, of strategic importance . First and foremost, this concerns organising the free circulation of data in the European Union and outside of its borders. The data is at the heart of the digital economy and its circulation must be defined and structured to organise a successful and responsible mining of such data. The second major challenge concerns that of the digital skills of employees, students or that of the entire population. Digital technology is transforming the workplace and creating new jobs. If we wish this to result in additional jobs, Europeans must be prepared and trained. Since this is the primary objective, measures must be taken without delay.
Moreover, digital technology, as with other sectors, suffers from a competition policy restricted to a minimum and that lacks an industrial objective . This is why the European Union should implement a competition policy that allows Europe to retain the most promising talent.
For these reasons, the European Union should successfully complete the digital single market in all its forms and reinforce its third pillar in favour of the emergence, on an international level, of European players in the digital economy.
It should moreover, be able to make greater use of its innovative capacity . While this has among the most excellent research centres in the world, solid assets in terms of technological and industrial skills and innovative companies, the European Union is struggling to benefit from the emergence of the leading markets. It should therefore provide better support for innovation in Europe, in continuation of its quest for excellence with the European Research Council. The European Union should therefore create a European innovation council .
Lastly, the European Union must also better assert its sovereignty in the digital sector. This means that it must both better protect its companies and citizens, and, be more present on the international scene.
The global internet tends to differentiate from one region of the world to another. The United States dominates this sector that it initiated. We are also seeing the emergence in China and Russia, in particular, of new forms of internet regulations and legislation. Europe must also create a digital sovereignty in line with its values.
To assert its sovereignty, Europe should better protect its interests, its companies and its citizens. In response to cyber threats that weigh heavily on democracy and businesses, this should strengthen cybersecurity and promote a genuine cybersecurity culture. It should also adopt its own technical standards on an international level, to protect its technology. Moreover, Europe must be present in the major world forums and have its rightful place in global Internet governance.
This is why today, we should support a Europe that asserts its digital sovereignty that protects and standardises, and which has an impact on global Internet governance.
2. Building the European Energy Union
Launched, on the basis of the treaty of Lisbon, through a European Commission's Communication of 25 February 2015, the European Energy Union must provide a response to the deficiencies observed in the European electricity system and to unify the fragmented regulations and markets, which has significant economic, social and environmental costs.
The European Union's energy sector also clearly has a geostrategic dimension . In 2014, the European Union imported 53% of its domestic energy consumption. Over 90% of oil is imported, while it retains a strategic role for transport, industry and defence. To source gas supply, the European Union depends on around 70% of both countries - Russia and Norway. This concentration of sources of supply with a limited number of partners is a fragility factor. Concerns relating to the security of the supply were reinforced by repeated gas disputes between Russia and the Ukraine. This is why a diversification of sources of supply and interconnections was thought desirable.
The withdrawal of the United Kingdom, one of the main energy hubs in Europe, has altered the stakes of the European Union's energy sector. The United Kingdom was, until just recently, one of the most committed countries in the reduction of CO 2 emissions (offshore wind, replacing coal with gas, increasing the share of nuclear power in the production of electricity).
As regards sectors that are not covered by the European carbon market (transport, building, agriculture), the departure from the United Kingdom will require a painful rebalancing between the member states, unless we revise our overall objective (-30 % in 2030), which sends a very negative signal in the face of great uncertainty on the future of the Paris agreement.
Most importantly, Brexit has weakened the European Union in international negotiations, particularly in the climate field. European solidarity in the field of energy must therefore be unequivocal.
Firstly, an overall reflection on European energy diplomacy is necessary.
The larger Member States make this diplomacy an essential component of their foreign policy. The European Union has unfortunately experienced divisive orientations, for example during the implementation of the Southstream project , finally abandoned by Russia, for the benefit of the gas pipeline project to Turkey. The European Commission has denounced six bilateral agreements concluded between the member states and Russia that do not meet European standards. Southstream moreover contributed to shelving the Nabucco European project, which should allow for a diversification of energy sources.
A further issue to consider is the Nordstream 2 project , which involves strengthening the capacity of the gas pipeline that already exists between Russia and Germany, and for which the Commission believes that it will only further increase the transport capacity considered excessive.
As recalled during the vote of the European resolution, adopted by the Senate on 11 April 2016, the European Commission must act in respect of the principle of subsidiarity, and, in this case, the right of the member states, guaranteed by the European treaties, to determine the overall structure of the energy supply. It is not simply a matter of giving any power of control to the Commission, but encouraging the member states to better coordinate their initiatives. It is an issue of power
Secondly, the European Union must retain its leading role in the fight against climate change, by encouraging the development of certain technologies of the future and to set a course for an accelerated transition towards a more resilient and lower-carbon world.
The European coordination effort in the sectors of the future did not face international competition. This may not allow for the development of truly competitive industrial chains, leaving us dependent for yet some time to come.
Lastly, the pursuit of a European Union's proactive policy moving towards a competitive energy transition must take into consideration global issues of economic and social balances. For example this would be the case for the regulated electricity sales prices for residential consumers. In circumstances where the States thought it was necessary to maintain these prices, they protect citizens-consumers against excessive fluctuations in price in this very sensitive area for everyday life.
3. Rebuilding the competitiveness policy
Observation: paradoxically, the member states trade four times less between them than the federal states within the United States. It is a strong signal that the single market must be enlarged.
Turning to competition policy , the European Union cannot continue to open up its markets wider and, at the same time, prevent the formation of major European groups. Bearing in mind the current rules of the competition policy, a European Google could never have emerged.
As regards agriculture, a working group set up by the Commission also arrived at a conclusion already shared by the majority of stakeholders: the competition policy, designed for the consumer, preventing any grouping of producers.
A new dynamic competition policy requires a review of the concept of a relevant market. The European market is not isolated, it is incorporated into the world market. The competition policy must be in the interests of the European industrial policy and not cause it injury. It should facilitate the emergence of European champions. It would thus be prudent to request a review of the assessment criteria by the state aid department of the European Commission:
- international competition should also be taken into account in the prior analysis of possible sanctions;
- state aid should also be considered as a lever for private investment in sectors with strong growth potential;
- as with derogations in favour of structural reforms and investment in the Stability and Growth Pact, state aid can be authorised if it is directly in furtherance of the industrial objectives of the European Union.
Businesses employing less than 250 people, whose turnover does not exceed 50 million euros, represent 99% of European businesses and employ almost 70% of the labour force in the private sector.
In 2008, the European Union introduced a " Small business act " (SBA) in favour of small and medium-sized countries. However altogether they have a whole range of recommendations rather than standards in favour of SMEs, contrary to the American Small business Act . It is advisable to go one step further and to consider, as the US is doing, reserving part of the public order of the member states to their small and medium-sized enterprises . The European SBA must moreover be supplemented with provisions facilitating access to finance, export aid and the development of one-shop stops.
Any industrial objective is also achieved through an alignment of taxation. A major European group may only really develop and take full advantage of the potential offered by several member states when it can rely on taxes that are both favourable to investment and harmonised across the European Union. This approach must also help to combat tax competition between the member states and the optimisation phenomena.
A gradual harmonisation of company, labour and capital taxation should be pursued. The Franco-German partnership may, in this respect, act as a laboratory.
The third means of action is investment
The monitoring group welcomes the projected increase of the capacity to intervene and the duration of the European fund for strategic investments (EFSI). In respect of its meaning, this measure must be complemented by a broad European debate on the removal of regulatory investment barriers.
This is achieved in particular by the completion of an EU capital markets project, insisting on the use of individual savings, highlighting sustainable funding in favour of investment in green technologies or the encouragement of the development of financial technologies or FinTech, whether this concerns online payment or factoring or participative funding, with the creation of an adapted European framework, ensuring the protection of key players.
In addition, it is considered essential that European public investment is in the interests of the creation of ecosystems, just like Silicon Valley , bringing together businesses, universities and financial and research centres. These ecosystems should be networked. The creation of an extraterritorial European company statute is desirable, as well as the coordination of university research programmes. The European ecosystem network must also be associated with a European network of Makerspaces or digital production workshops. This would enable the sharing of manufacturing tools and skills with a view to launching projects or building prototypes.
The European Union is mainly focused on consumer protection and, with the financial crisis, on the regulation of the financial markets, without addressing the administrative difficulties that European companies may be confronted with, particularly smaller companies. These face an overlapping of European standards, sometimes involving their timely application. There is therefore a need to encourage the drafting of a European business code, consolidating the existing rules into a single structured and comprehensive document.
On an institutional level, in order to measure the progress achieved in favour of the development of the internal market and the promotion of a real European industrial policy, the European semester needs to be given a pillar dedicated to a single market and to carry out regular monitoring (promotion of European industrial objectives, the identification of obstacles and assessment, on the basis of quantitative and qualitative indicators, recommendations). The system should be above all an incentive-based system.
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Recommendations for a competitive Europe 1. Building the European digital sector Successfully completing the digital single market in all its forms and reinforcing its third pillar in favour of the emergence, on an international level, of European players. Setting up a European innovation Council; Supporting a Europe that asserts its digital sovereignty, which protects and standardises, which strengthens its cybersecurity and which has an impact on global Internet governance. 2. Building the European Energy Union: Promoting the European Energy Union particularly in its diplomatic dimension, by better coordinating the initiatives of the member states, in accordance with the principle of subsidiarity; Maintaining a leading role to cope with climate change by contributing to the development of future technologies; Safeguarding the global issues of economic, social and environmental balances of the energy sector to protect the citizen and consumer from excessive fluctuations in price. 3. Rebuilding the competitiveness policy Putting in place a competitiveness policy to support an industrial revitalization in Europe; Progressing towards tax convergence starting with the Franco-German framework; Consolidating the European investment dynamic and, in particular, creating a European ecosystem network to support innovation, growth and employment and considering the creation of a European extraterritorial business statute; Adopting a European business code, consolidating the existing EU rules; Establishing an "internal market" pillar within the European semester in order to measure progress in favour of its enhancement. |