06 Jan 2006

Enlargement and Industrial Competitiveness: Policy Implications for New and Old Member States of the EU

David Kernohan / Jorge Núñez Ferrer

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This paper draws policy conclusions for the EU based on the studies performed for the Fifth Framework Programme on industrial competitiveness and other relevant literature. The issue of competitiveness of the new member states and the implications of enlargement for the EU as a whole and for individual member states is complex. This paper discusses the policy implications that result from the research undertaken in the context of this project and presents some additional considerations. Policy actions on industrial competitiveness may be taken at national or EU level. Understanding the positive and negative implications of specific policy interventions is very important, as national or sectoral interests can clash with an optimum EU policy. The paper generally recommends avoiding specific industrial policies, in particular at member state level, that would harm other member states. Industrial competitiveness depends heavily on the investment and economic climate in the member states. This paper recommends improving this climate and in particular completing the single market also for services.