EU switches emphasis from protective subsidies to raising skills

The European Commission launched a new industrial policy yesterday which targets boosting skills and research and development, rather than providing subsidies to protect vulnerable sectors from competition.

The strategy proposes seven major initiatives that cut across different policy sectors such as intellectual property rights, competitiveness and managing structural change within the manufacturing sector.

Other measures include simplifying legislation, boosting research and development and improving skill levels across a range of different industrial sectors.

It also focuses on more specific policy initiatives such as setting up a pharmaceuticals forum, a task force on competitiveness in the information, communications and technology sector, and reviewing the biotechnology strategy. The strategy contains measures to support the manufacturing sector in the EU, which has been deeply affected by competition from India and China in recent years.

Enterprise commissioner Gunter Verheugen said manufacturing had a vital role to play in securing Europe's future prosperity. However, he warned there could be no way back to the old days of protectionism and subsidies within the EU.

"Politicians don't create jobs. But we can create the right framework for industry to thrive," Mr Verheugen said in response to criticism from French president Jacques Chirac on Tuesday.

Mr Chirac had accused the commission of failing to protect European jobs.

Mr Verheugen said it was not up to Brussels to steer and guide industry, and that global competition offered opportunities as well as challenges.

"We do not want to protect industry from competition. We want European industry to be exposed to competition," he said.

Mr Verheugen said many of the initiatives could be carried out at low cost, but funding would be required to rebuild infrastructure and boost research and development.

The commission proposal will now be subject to a consultation process with member states, social partners and other stakeholders.

The proposal is intended to work alongside other strategies being adopted at member-state level to promote the Lisbon Agenda, the EU's drive to become the most competitive regional economy in the world by 2010.