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Industrial production decline: How Europe solves this problem?

Author : Pavlo Vernivsky

Source : 112 Ukraine

A year ago, the governments of 19 EU countries signed a statement on the adoption of a comprehensive and aggressive industrial strategy, as a response to fierce competition with China and the United States
20:32, 18 February 2020

Open source

The industry growth in Ukraine is falling sharply. What is the Ministry of Economy doing? Draws graphs to show how the industry is falling in Europe.

At the same time, the ministry does not notice or does not want to notice how the EU is solving this problem. And they solved it! And there are now cardinal shifts in the EU industrial policy.

A year ago, the governments of 19 EU countries signed a statement on the adoption of a comprehensive and aggressive industrial strategy, as a response to fierce competition with China and the United States. The proposal was to amend antitrust laws and merge large European companies to create European industrial champions.

One of the first such episodes would be the merger of two major railway manufacturers - Alstom and Siemens. This merger would create the world's second-largest producer in this segment, after the Chinese CRRC state giant.

However, European competition commissioner Margret Westagher blocked the deal, as such a giant could destroy smaller producers, become a monopolist and harm European consumers.

The governments of Germany, France, Italy, and Poland have a different opinion. If Europe wants to compete on equal terms with the state-owned industrial champions of China, the creation of such giants is critically necessary. And they are already starting to put pressure on the European Commission. The European Commission is expected to adopt a new industrial development strategy on March 10!

Do you understand the difference? European politicians, unlike our politicians, see very different reasons for the decline in industry. The main problem they see in China, which has created international giants at the state level.

And these giants, due to the scale effect, as well as increased financial support from the government, are destroying European and American companies. Therefore, one of the solutions is to help create European megacorporations like Airbus to withstand the onslaught of China.

In fact, this situation does not arise for the first time in history. It is enough to recall the trade war of Reagan and Japan. Especially the international confrontation in the production of cars or semiconductors. Then USA managed to slow down Japan. And most importantly, such countries as South Korea became one of the winners in this game.

I do not claim that Ukraine can compete on an equal footing in this struggle. Only these trends should lead to certain conclusions. The main conclusion is that if our country does not take any measures to protect domestic producers, if it does not find a way to benefit from this situation, then we will simply be crushed between a hammer and a hard place.

Related: EU evaluation mission on industrial visa waiver to visit Ukraine, - PM Honcharuk

Related: Ukraine interested in cooperating with U.S. in railway industry, - Zelensky

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