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Antonio Tajani

Vice-President of the European Commission responsible for Industry and Entrepreneurship

“Strengthening Competitiveness”

Associazione Stampa Estera

Rome, 14 October 2011

With this Communication, the European Commission intends to further strengthen its efforts to increase competiveness and growth and to render European economic governance more effective.

The text adopted today clearly indicates that structural reforms are needed in order to defend the euro and the internal market and to be able to leave the crisis behind us. The key areas on which we need to act now are the sustainability of the welfare state and the labour market, research and innovation, the efficient use of resources, the elimination of obstacles and barriers to the internal market and business potential and support to SMEs.

The Communication is accompanied by data and so-called "scorecards" on different levels of competiveness of the EU Member States. This information is reflected in two documents that are attached to the Communication: 1) The European Competitiveness Report; 2) The Policies on and Performance of the competitiveness of the Member States.

A contrasting picture emerges that shows strong disparities between the results of the different States. For example, labour productivity in the manufacturing sector is almost 125% of the added value in Ireland to less that 20% in Bulgaria. The percentage of innovative companies varies from 80% in Germany to 25% in Latvia. Finland is the country that has the most business friendly administrative procedures and regulation whereas Italy is the, let's say, "black sheep of the family".

With respect to industrial competiveness, Europe is essentially divided in four groups: the first, with Austria, Belgium, Denmark, Finland, France, Germany, Ireland, the Netherlands, Sweden and the United Kingdom, has a strong industrial structure, dominated by advanced technological sectors, capable of producing strong added value. In the second group, comprised of Cyprus, Greece, Italy, Luxemburg, Portugal and Spain, industry specialisation covers areas that are less advanced in terms of technology, despite the presence of some highly competitive industries. In the second group, Italy characterizes itself by having a greater capacity for innovation and quality. The third group, with the Czech Republic, Hungary, Malta, Poland, Slovakia and Slovenia, includes countries that are catching up in terms of GDP per capita and whose expertise covers technologically innovation-intensive sectors, as the countries of group one. The fourth group, comprising Bulgaria, Estonia, Latvia, Lithuania and Romania, is in a phase recovery but with a specialization in sectors that are less advanced in terms of technology.

The Report confirms that to regain market confidence, it is not enough to be rigorous, but that it is essential to return to growth and to be competitive; and this is only possible by placing companies and their potential at the centre of political action and by strengthening of the instruments of economic coordination.

The new package of six measures on governance, that have just been approved, attributes to the Commission the most effective instruments in respect to the Stability and Growth Pact, not only regarding to debt and deficits, but also to push the States towards a real convergence of their levels of competitiveness. The crises has evidently shown that also countries with accounts that are in line could jeopardize the strength of the euro by inadequate levels of performance.

Today's communication aims to strengthen governance in the context of the European semester and the recommendations by the European Commission, indicating precisely what each State is called upon to do, as of now, namely to improve their competitiveness. Two days ago, we presented to the Parliament an action plan for the stability and growth that will be presented to the European Council of 23 October 2011. The plan is articulated in five strictly interlinked points: 1) decisive action to avoid default of Greece and to put it back on the road to economic stability; 2) the implementation of the measures decided upon on 21 July 2011 to enhance the effectiveness of the EFSF (the European Financial Stability Facility); 3) a coordinated strategy to strengthen European banks and to prevent possible weaknesses from affecting the real economy; 4) the further strengthening of the economic governance centred on the Community method; and, 5) the acceleration of policies to support stability and growth in key areas such as resource efficiency, international trade, taxation, industry and SMEs.

Despite difficulties, I remain optimistic. I am convinced that our industry is strong, of the rich potential and capacity of SMEs in facing the challenges of a globalised world. But politics needs to acknowledge its duty and the urgency of doing its part in full.

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