Orgalim welcomes Draghi's call for radical change to boost EU competitiveness

Orgalim welcomes the ambition of Draghi’s report. A new industrial strategy must be the  top priority of the next EU mandate in order to safeguard Europe’s competitiveness and its interests in an unstable, fast-changing new global order.  

Unlock European innovation  

We agree with Draghi that there are structural barriers that are preventing Europe from realising its full innovation potential.  

• Unleash the power of the single market. Although it has been left fragmented and incomplete for too long, the single market remains our greatest asset in the race to secure Europe’s long-term industrial competitiveness, generate wealth, safeguard jobs and guarantee the net-zero transformation. Read our key recommendations on unleashing the power of the single market. Although it is regrettably not mentioned in Draghi’s report, Orgalim stresses the vital role of standardisation in unlocking the full potential of the single market. Read our key recommendations on European standardisation. 

• Reduce the regulatory burden. In the period 2019-2024 3,500 pieces of legislation were passed in the US at federal level, against 13,000 acts passed by the EU in the same period of time. Orgalim calls on the next Commission to address the increasing burden of cumulative national gold-plating, overregulation and double regulation that is holding back Europe’s high-tech manufacturing companies just when they are most needed for a clean and competitive economy. See examples of the unnecessary burdens arising from badly designed regulation here. 

• Increased uptake of digital technologies is key for innovation, decarbonisation and ultimately, competitiveness. Draghi reports that “the key driver of the rising productivity gap between the EU and the US has been digital technology” and Europe looks to be falling further behind. However, the report also suggests that 70% of the new value created globally over the next ten years will be digitally enabled, so the risk of value loss for the EU keeps increasing. Orgalim calls on the EU to support the diffusion of advanced manufacturing technologies, which Draghi’s report also recognises as a key capability in Europe’s industrial innovation base. 

Decarbonisation and competitiveness must go hand in hand: delivering the net-zero transformation 

Orgalim strongly supports Draghi’s call for a joint plan to turn the challenges of decarbonisation into a competitiveness and growth factor. The push for massive investments, technological neutrality and removal of barriers to scale up clean technology manufacturing are welcome proposals. In our policy agenda for 2024-2029, we lay out the need for a competitive and secure energy supply, including broad-scale electrification of Europe, to enable a scale-up of carbon-neutral energy capacity and smarter, more flexible energy systems. An integrated energy market would also lower costs and make us more resilient in the face of future crises. 

The pursuit of economic security: addressing dependencies in raw materials and clean tech 

Our industries’ ability to provide the technologies needed for the green transition depends on a stable and reliable supply of critical raw materials (CRMs). However, the EU currently sources CRMs from a handful of countries with which it is often not strategically aligned, exposing itself to increasing risks of economic coercion.  

We therefore fully agree with Draghi that the EU should use trade policy to build a resilient supply for CRMs, concluding free trade agreements with resource-rich countries. We also agree that targeted trade defence measures rooted in economic evidence can in some cases help to restore the level playing field for our industries, which often face unfair competition from heavily subsidised foreign producers.  

However, these must not become the sole objectives of EU trade policy. The EU must continue to remove barriers to export and open new market access opportunities for European companies worldwide. In a recent declaration co-signed with 30 other associations, we stress the importance of an open trade policy to boost the EU’s competitiveness. 

Funding instruments that support innovation and scale ups 

We recommend a comprehensive critical review of the effectiveness of existing EU funding instruments, undertaken in consultation with the industrial sectors concerned. Deployed judiciously, public funding can be a key driver of innovation and growth for the EU, and can incentivise private investment in Europe which remain far below required levels. To focus on public private partnerships for public support is something that Orgalim welcomes. The report also brings up the lack of coordination when it comes to national state aid in the EU but no solution is brought forward. Orgalim recommends that national state aid should be capped at a maximum of 2% of GDP – above that level, funding should be pooled into shared European instruments to prevent an internal subsidy race between Member States. Read our key recommendations on investments. Orgalim notes the proposal to revise EU competition rules, but we warn that weakening them should be carefully assessed to avoid unintended negative effects on Europe’s competitiveness. 

Although we recognise that it will be difficult to get political support for all of the proposals in Draghi’s report, it is crucial that newly elected EU leaders act to ensure that the region is an attractive place to do business, and that it retains its place as a world leader in high-tech manufacturing and sustainable innovation. The time to act is now. 

We stand ready to engage with the current and upcoming Commission on strengthening Europe's competitiveness while delivering the net-zero transformation. Read Orgalim's policy agenda