The report correctly points out that industrial policies at EU level can have heterogeneous distributional effects, i.e. subsidies at EU-level might be concentrated on some countries. But from that, they jump to the conclusion that the EU should not do vertical policy at all, just coordinate. (12/n)
But, as argued convincingly by Draghi, EU policies with common financing are the only way for the EU to do industrial policy at the needed scale! (I have argued myself that, given lack of EU funds, coordinating member state action is needed - but only as temporary fix tinyurl.com/JDC-Jaeger) (13/n)
What's worse, it's precisely bcs of a fragmented IP landscape that we'll have a hard time 'letting go of losers' (which MS is going to be convinced to let go of their national champion + €bn they've spent bcs the neighbouring champion won the tech race...) they (rightly) fret about
Third, the report argues against declaring certain industries as strategic priorities, since 'strategic' is hard to define and causes all industry to lobby. These are indeed risks, but they can be mitigated with good policy design. More importantly, though,...(14/n)
... doing industrial policy without strategic prioritization won't work: the EU must play to its strengths and be mindful of its weaknesses vis-a-vis China&US. And if this prioritization is not done explicitly, it's still done implicitly, revealed by government focus & allocation of subsidies.(15/n)
Conclusion: The German government should help advance common EU industrial policy, instead of taking two steps back by following the scientific board's advise on these three critical issues. Given the board's obvious expertise, perhaps its next report can show how to operationalise this. (end).
here the board's report (in German) www.bundeswirtschaftsministerium.de/Redaktion/D...
Helpful thread thank you for the work you put in it