For an innovative Europe: Germany and France draw up position paper for European industrial strategy

About a year ago, the European Commission published its factsheet for a new industrial strategy for a globally competitive, environmentally friendly and digital Europe. At that time, the corona pandemic had already demonstrated that new industrial value chains are essential if Europe is to remain strategically independent and competitive. On 16 February 2021, the German Federal Minister for Economic Affairs and Energy, Peter Altmaier, and the French Minister for the Economy, Finance and Recovery, Bruno Le Maire, have now gone a step further and agreed on a Franco-German position paper on the European industrial strategy and its update in the spring of 2021. Germany and France have thus once again demonstrated that Franco-German friendship is a driving force of Europe's economy.

The aim of a change in industrial policy is to strengthen the framework conditions for innovative industry in Europe.

The new industrial strategy focuses on digitisation, the CO2-neutral production of goods and the international competitiveness of the EU. The previous European industrial strategy from March 2020 is to be modified and expanded by the Franco-German proposed amendments.

Strengthening of the internal market

Both the EU Commission and the Franco-German position paper see the European Single Market as a future-proof regulatory environment that creates competitiveness and sustainability and thus offers a springboard for European companies in global competition. To this end, the internal market is to be strengthened further. In line with an expected Commission initiative and the update of the EU Action Plan of 10 March 2020 on better implementation and enforcement of internal market rules, the Franco-German position paper proposes to establish precise and clear rules on investment protection and effective enforcement mechanisms. This should also secure future investments within the EU.

Green transition

As part of Europe's transformation towards climate neutrality, a new European Clean Hydrogen Alliance was launched in July 2020, bringing investors together with governmental, institutional and industrial partners. The Franco-German position paper proposes further industrial alliances - and cites the field of aviation biofuels as an example in line with the Franco-German cooperation and companies. There are also concrete plans to jointly produce battery cells for electric cars.

Digitisation and new industrial alliances

Another focus of the European industrial strategy is digitisation. According to the EU Commission, only about one in ten EU companies analysed Big Data in 2018 and only one in four used cloud computing services. In the EU 2020 Strategy, the Commission already planned to examine coordinated investments by member states in the context of new so-called Important Projects of Common European Interest (IPCEI). The Franco-German position paper explicitly advocates support for the projects currently under discussion, such as the IPCEI for microelectronics and connectivity and the IPCEI for cloud infrastructure and services. In addition, it also suggests concrete resource planning and a provisional timetable for starting the projects. It also aims to create new initiatives in the digital field to support industrial transformation, particularly with regard to Industry 4.0 Work and digital innovation hubs, and to improve cyber security in the B2B sector.

Strengthening of European sovereignty

As a consequence of the corona pandemic, the Franco-German position paper also calls for the promotion of the diversification of international supply chains and of production and investment in Europe. In this respect, the EU is to propose measures aimed at strengthening market-based reactions in order to reduce strategic dependencies. The corona pandemic has ultimately shown us that access to medical products and medicines as well as the security of supply are essential factors for the competitiveness, security and autonomy of Europe. The first results of an analysis carried out by the Commission on the EU's strategic dependencies now need to be implemented as a starting point for action. The position paper also calls for new European initiatives in this area. In addition, the European system of investment control is to be further improved.

Outlook

At the opening of the EU Industry Days 2021, EU Commission President Ursula von der Leyen announced an update of the EU industrial strategy. The corona pandemic has shown that a strongly integrated industrial policy in Europe is essential. France and Germany are giving further impetus to European industrial policy with their position paper. It remains to be seen which of these proposals will be adopted by the EU Commission for the revision of the European industrial strategy.

In a follow-up article, we will explain how the implementation of the industry might look, in particular which legal forms of cooperation between German and French companies exist. We will also report in our next article on the Franco-German call for the funding of innovation projects in the field of artificial intelligence.

Our experts of Oppenhoff’s French Desk would be happy to advise you on all legal and tax issues relating to your activities in Germany.

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