I attended an informal meeting of Ministers of Industry on 19 and 20 March last at Nyborg in Denmark. There were three items on the agenda for the meeting viz.: industrial policy, the situation in the steel industry in the Community and the situation in the shipbuilding industry. Because the discussions on industrial policy and the situation in the steel industry took more time than anticipated the discussion on the shipbuilding industry was very brief and was effectively postponed to the May Council of Ministers of Industry.
In the discussion on the steel industry the Commission reported on recent developments. Major retrenchments in the industry have been announced in Germany. Financial arrangements for necessary rationalisation in the industry are under consideration by the Commission. The Commission is investigating whether recent support made available by Spain and Italy to steel industry projects are compatible with EC State aids policy for the industry. These issues will be considered again at the next Council meeting in May.
The discussion on industrial policy was wide-ranging. The Presidency had circulated a paper broadly endorsing the previous Commission approach to industrial policy published in 1990. Basically this proposes that the best approach to the promotion of a strong, competitive industrial structure is to adopt what are known as "horizontal" measures across all areas of public policy which create the conditions within which profitable industrial projects can develop and prosper. The objective is to promote permanent adaptation to industrial change in an open and competitive market. The need is also accepted to establish better control of Government subsidies for industry, especially in the case of highly capital-intensive projects.
There was a widespread acceptance at the Council that these principles of an industrial policy for the community remain valid. I made the case that the approach and principles adopted for a Community industrial policy, while still of relevance, need to be examined and updated in the light of developments that had since taken place including the high levels of unemployment now found across all Community countries. I stated that the currency turmoil of recent months has been of particular importance from an industrial policy point of view. It has undermined investor confidence in productive investment projects with a consequent diminution in employment and the analysis of that important issue called for at the Birmingham Summit was not yet available. I emphasised the need to have this commission on analysis available as a matter of urgency.
I endorsed the need to improve controls over State aids, particularly in the more prosperous and central regions of the Community which use these aids to attract investment at the expense of employment in peripheral regions of the Community. I also stressed the importance which a Community industrial policy must attach to the development of small and medium-sized industries which are of particular importance to the creation of employment in Ireland. I drew attention to the opportunities for employment creation in smaller countries from the increasing interaction of new developments in telecommunications with the production, distribution and marketing of industrial products. I stressed that a dynamic Community industrial policy is necessary and must be based on the solid foundation of a European Single Market and the development and application of new technologies which require to be made widely available to small and medium-sized industries in countries such as Ireland with the support of Community policies.
There was widespread agreement at the Council on the need to update the Commission's 1990 document on industrial policy in the light of the discussion at the Council and the Commission are to do further work on this.