Davos head of the EU commission Ursula von der Leyen he has advocated extensive industrial policy interventions to move Europe forward in the global race for climate-friendly technologies. With the right support for companies, “the history of the cleantech economy in Europe will be written,” von der Leyen said at the World Economic Forum in Davos.

Praise for von der Leyen’s initiative came quickly from the federal government. “I expressly welcome the plan. That was a very important signal today in Davos”, said the Minister of Economic Affairs. Robert Habeck (Greens) the Handelsblatt.

Von der Leyen’s idea consists of four parts: the commission wants to speed up the construction of new wind farms or battery factories, promote environmentally friendly technologies, qualify workers and conclude new trade agreements with other countries.

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Stefan Schaible, head of consultancy Roland Berger, told Handelsblatt: “Finding an answer to the IRA is the vital question of the European economy.” Support through subsidies and tax breaks is one thing. But just as important is a smart industrial policy geared towards innovation.

Von der Leyen: facilitating the financing of environmentally friendly technologies

“We need to create a regulatory environment that allows us to expand rapidly and create favorable conditions for crucial industries,” von der Leyen said, referring to the need to speed up the construction of wind farms and battery factories. The Commission will propose a new “net zero industry law”, inspired by the “European Chip Law”, which aims to boost semiconductor production in Europe.

The law should also go hand in hand with the “Raw Materials Law”, which aims to improve Europe’s access to critical raw materials. “For rare earths, Europe is now 98 percent dependent on one country: China,” von der Leyen warned. This has pushed up prices and threatens Europe’s competitiveness. The refining, processing and recycling of raw materials must be improved in Europe.

Robert Habeck

The German Economy Minister supported von der Leyen’s initiative in Davos.

(Photo: AP)

On promoting environmentally friendly technologies, the Commission chief said: “For European industry to remain attractive, it is necessary to keep up with offers and incentives outside the EU.” Program. Therefore, Von der Leyen wants “temporary” adjustments to competition law to make help faster and easier.

Unlike in the past, not only innovative technological developments should be promoted, but also technologies that are already on the market and for which Europe wants to create more production facilities.

The third part of his industrial plan is the qualification of the workers. “The best technology is only as good as the skilled workers who can install and operate it,” von der Leyen said. The growth of future technologies is only possible with a huge increase in skilled workers.

EU industrial policy could overwhelm some member states

As a fourth, new trade agreements must form the basis for “strong and crisis-resilient supply chains.” Agreements are being worked on with Mexico, Chile, New Zealand and Australia, it is possible to advance with India and Indonesia.

>> Read also: The EU Commission wants to confront the US with new debts

The Mercosur agreement with the most important economies in Latin America must also be a topic again, demanded von der Leyen. “International trade is key to reducing the costs of our industry to create jobs and develop new products.”

Such an industrial plan is likely to pose major challenges for the EU’s internal market. By no means all member states can afford a multi-billion dollar investment industrial policy Afford. Therefore, the EU Commission proposes a “sovereignty fund” so that as many member states as possible can give aid. Internal Market Commissioner Thierry Breton has already collected ideas on this.

thierry breton

The Frenchman is already collecting ideas on how the industrial plan could be financed at EU level.


(Photo: Reuters)

For example, the European Investment Bank could make loans and previously unused funds from the Corona recovery fund could be reallocated. Breton also shows sympathy for the joint debts. It is about establishing a “safety net”, Breton said on Tuesday, and no EU country should be left behind.

But this is exactly the point where controversy threatens. In Germany, the FDP in particular is blocking the move, but the Dutch and EU net contributors are also against it. Federal Finance Minister Christian Lindner (FDP) warned in Davos of a “competition over who can pay the most subsidies”.

His cabinet colleague Habeck, on the other hand, welcomes the Commission’s initiative: “The plan is necessary for a strong and climate-neutral Europe and it is more important than ever at this time to look to the future in addition to aid for acute crises”. The proposals coincided with what the federal government has elaborated. “Europe will not lose the competition,” Habeck said.

More: France wants to revolutionize Europe’s industrial policy, but the federal government is skeptical

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