Shut Out? South East Europe and the EU's New Industrial Policy

2015

In the paper are analysed post-socialist development in SouthEast Europe (SEE) and the role of industrial policy. Countries of the SEE introduced market and other post-socialist transition reforms applying the so-called 'shock therapy', with subsequent transitory drop in GDP, standard of living and industrial production. Particularly industrial collapse happened to appear as the 'Achilles heel' of the SEE economy. The SEE 2020 Strategy tends to reverse current trends from the consumption-led model of growth to export-led and foreign direct investment (FDI) driven type of growth, based on accelerated technological development, growth of competitiveness and completion of socioeconomic reform. However, there has been no evidence that is the FDI type of growth would be more efficient for regional development than that based on regional savings, remittances and resources of domestic investors. We have shown that the FDI in the SEE are three times lower than the amount of regional savings and remittances. In recent years domestic sources tremendously exceeded the total sum of FDI. The current situation and future prospects call for developing a common approach in this region, and concomitant supra-national regulations and institutional arrangements.

The paper analyzes the main characteristics and major changes in manufacturing industry in the old EU member states over the past twenty years, in order to draw some lessons for the Southeast European economies in transition, often referred to as the Western Balkans (WBs) -Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia. During the last twenty years the more developed EU member states have experienced substantial changes in the structure of their economies, with services becoming the prevalent sector in terms of the most important indicators. Nevertheless, there is great heterogeneity within the EU regarding the contribution of manufacturing to employment and value added. The global financial and economic crisis from late 2008 onwards has revived the debate about the role of industry, its importance for economic growth and for international competitiveness. In this context, there has also been a renewed interest in industrial policy and reindustrialization. The ongoing analysis of trends in the EU could be extremely relevant for the WB countries, since these countries have gone through a process of strong deindustrialization. Given that their level of economic development is still low, manufacturing industry remains indispensable for future economic growth. The EU experience could offer useful guidelines for formulating future policies in this area.

The paper analyzes the main characteristics and major changes in manufacturing industry in the old EU member states over the past twenty years, in order to draw some lessons for the Southeast European economies in transition, often referred to as the Western Balkans (WBs)-Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia. During the last twenty years the more developed EU member states have experienced substantial changes in the structure of their economies, with services becoming the prevalent sector in terms of the most important indicators. Nevertheless, there is great heterogeneity within the EU regarding the contribution of manufacturing to employment and value added. The global financial and economic crisis from late 2008 onwards has revived the debate about the role of industry, its importance for economic growth and for international competitiveness. In this context, there has also been a renewed interest in industrial policy and reindustrialization. The ongoing analysis of trends in the EU could be extremely relevant for the WB countries, since these countries have gone through a process of strong deindustrialization. Given that their level of economic development is still low, manufacturing industry remains indispensable for future economic growth. The EU experience could offer useful guidelines for formulating future policies in this area.

Ekonomiaz Revista Vasca De Economia, 2013

1. Introduction and outline 2. The specific problems of the southern periphery in Europe 3. Innovation, regulation, globalisation 4. Current reform strategies 5. A new industrial policy: general claims and a definition 6. The specific need for an industrial policy in the periphery 7. Towards a strategy for the southern periphery References Palabras clave: Competitividad del sur de Europa, periferia europea, nueva política industrial, consolidación para recuperar el crecimiento, sistemas económicos.

2007

This paper examines the state of Europe's industry and competitiveness in the current crisis and provides the rationale for a new industrial policy at the European level. Section 1 documents the decline of EU industry and the losses in outpud resulting from the crisis started in 2008. Section 2 investigates the issue of competitiveness, an issue at the top of the EU Commission policy agenda. Competitiveness is seen at the heart of economic growth and in the current crisis much of the policy advice from Brussels has focused on ways to restore the competitiveness of weaker countries. Mainstream notions of wage-driven price competitiveness as a determinant of export success of EU countries are not convincing. Rather it is technology, product quality, immaterial capabilities and the characteristics of goods and sectors that are crucial factors explaining the dynamics of productivity and competitiveness in Europe. Section 3 is devoted to the employment dimension. During the recession the job creating potential of product innovation has been lost leaving space to process innovations and job losses that have hit hardest craft and manual workers. A process of skill, job and wage polarisation has characterised the European employment structure leading to increasing inequality and poverty. Not all European countries have been affected in the same way, leading to a cntre-periphery polarisation in terms of unemployment and productivity. Section 4 concludes with a specific proposal for a new European industrial policy that could orient structural change towards enironmental sustainability, ICT applications and health and welfare systems. In these fields the employment impact is likely to be significant also in terms of skills and wages of the workforce. Sintesi

After the economic crisis of 2008–2010 the Member States, instead of improving cooperation and deepening their integration within the Internal Market of the EU, began thinking about public interventions, including changes in state aid rules and the introduction of a new industrial policy. The concept of a new industrial policy is subordinated to the Europe 2020 strategy, although achieving its targets may in some instances contradict the main goal: increasing the competitiveness of the EU’s entrepreneurs. Moreover the European Commission established the goal of reversing the declining role of manufacturing, which in 2012 stood at the level of around 16 per cent of GDP, aiming to increase its level to 20 per cent of GDP by 2020, although this is not the EU industry competitiveness index. Due to the many statements, declarations and letters issued by the Member States about the need for a new industrial policy, it is important to identify the real industrial leaders of the EU and their approach to public interventions within the internal market.

2017

Over the past two and a half decades, the economic landscape of Central and Eastern European economies went through several waves of transformation. The demise of traditional industries and the rise of the service sector during the 1990s inclined economic structure towards deindustrialization. The events over the next years paved the way for the rise of new industries in many of these countries and embarked them on the route of reindustrialization. However, in some countries the rise of new industries was more modest and took place at a much slower pace. Such development can be attributed to the process of industrial restructuring as well as industrial policies. The recent rise of awareness about the importance of industrial development for the growth and well-being of nations makes it relevant to investigate the sources behind changes in the economic structure of Central and Eastern European countries. Our findings reveal two groups of CEECs, defined as reindustrializing and those ...

in: Pálné Kovács, Ilona – Scott, James – Gál, Zoltán (Eds.): Territorial Cohesion in Europe: For the 70th Anniversary of the Transdanubian Research Institute. Institute for Regional Studies, Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Pécs, 377–390., 2013

The territory of post-socialist Europe is a space fragmented by old (historical) and recent (post-socialist) divisions. The frameworks of integration and directions of orientation have changed multiple times within one century, but there are also long-running differences which continue to affect development processes. Like all macro-regions of Europe, overall development trends are characterised by strong path-dependency, and are formed by socio-economic as well as political conditions. In this paper, I examine the industrial development of South-Eastern Europe from a comparative perspective, in contrast with the development processes seen in the Visegrad states. De-industrialisation and disintegration, as well as reindustrialisation and reintegration processes will be studied. My main question concerns the nature of development: if we consider both Central and South-Eastern Europe a part of the European periphery, are the two showing the same processes in industrial development, or are the models fundamentally different? Can we speak of a simple development lag (difference of degree), or do the differences amount to something qualitatively different (difference of kind)? The answers to these questions have far-reaching implications for both the region itself and to broader Europe.