Council of European Employersof the Metal, Engineering andTechnology-based industries

manufaCtuRinGa stRonGeR andGReeneR euRoPe

oRGaLime and CeemetPOLIC Y MANIFESTO

manufaCtuRinG a stRonGeRand GReeneR euRoPe

The manufacturing industry represented by CEEMET and ORGALIMEvery much welcomes the European Commission’s recent clearmessage stressing that industry is vital to the economic recovery,industrial output must grow to reach 20% of GDP and that thepolicy focus has shifted towards reaching this target, growth andjob creation. Our industry also endorses the objective of the EU totransform Europe into a more sustainable economy and is eager toparticipate in the debate on how to achieve both the 20% targetand the transition towards a sustainable economy.

In its recently published Communication “A Stronger European Industry forGrowth and Economic Recovery”, the European Commission develops avision on how to achieve this 20% target. It also seeks to outline its ideason innovation leading to a cleaner/greener low carbon economy.

Both ORGALIME and CEEMET believe that their industry sector, whichis the largest manufacturing sector in Europe, representing over 200,000companies employing 13,000,000 people, is at the heart of this transitiontowards a stronger and greener economy through the technologies,equipment and systems which our companies provide to all other industrialand economic sectors, as well as to consumers.

We agree with the Communication stating that, in a fast-changing world,if the EU wants to maintain its position as one of the world’s leadingeconomic blocks, it must provide the right framework conditions capableof attracting companies to invest in Europe.

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Whilst we welcome many of the Commission’s proposals, we feel thatadditional elements will be necessary in order to achieve this new 20%target. In the present manifesto, therefore, CEEMET and ORGALIME aimto outline what we see as the right framework conditions and how Europeshould seek to attain these.

We highlight hereafter a number of core issues for our industry, wherewe believe improvements will help to trace the path towards a strongerand greener manufacturing economy in Europe; we cover the areas of theinternal market, the EU’s policies on regulation and infrastructure, labourmarket reforms, energy, finance, skills and trade by suggesting concreterecommendations to the European decision-makers.

OUR INDUSTRY

• 2,600 billion € of annual turnover• 13,000,000 people employed• 200,000 companies, mostly SMEs• Strong export orientation

tHe need foR CoHeRent, stabLeand PRediCtabLe ReGuLation

Relevance, cost-efficiency, proportionality, subsidiarity and efficiencyfor business should be the guiding principles of any new EU regulation.Insofar as action at the EU level is deemed necessary and possible,careful consideration must be given to options such as soft law measuresand contractual freedom.

We strongly support the EU’s Small Business Act and Smart Regulationexercise as these aim to “simplify and generally improve the regulatoryenvironment”. We also welcome the appointment of the high-level groupof independent experts (High Level Group on Administrative Burdens)that the European Commission has appointed to “advise it on reducingadministrative burdens linked to its legislation”.

To better align the Smart Regulation agenda with the overridingimperative of driving stronger economic growth, we therefore call on theEuropean institutions to:

• Make a firm commitment to reduce the burden of regulation onEuropean businesses, starting with an ambitious action plan withdefined targets to succeed and build upon the administrativeburdens reduction programme which ends in 2012.

In these challenging economic and financial times, Europe needsto send out a clear message that it is open for business and makesure that additional burdens for companies are limited to those thatare strictly necessary to strengthen European competitiveness,sustainable growth and employment.

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• Ensure that this plan addresses the total costof regulation, not only administrative burdens,and targets a reduction in the overall burden ofregulation facing European businesses. Thisshould include a commitment that the costreduction delivered by the programme willoutweigh the cost of new regulation introducedduring the same period.

• Make sure that the Commission’s 2013-2020health and safety strategy focuses on effective,consistent and well-targeted application ofexisting legislation rather than production of newdirectives or the addition of new requirements toexisting ones. We are concerned that the original,holistic approach to assessing and managinghealth and safety risk is being undermined by(a) hazard-specific directives, where the risk ofharm is not justified by the available evidence, forexample, Electro Magnetic Fields (EMF) and (b)proposals to introduce Directives where it wouldbe more effective to promote H&S improvementsthrough the use of non-statutory Commissionguidance,for example Musculoskeletal Disorders(MSDs). Any new requirements should be basedon scientific evidence and risk assessment.

• Commit to continually improve the quality ofcomprehensive, transparent and impartial impactassessments that support legislative proposalsand the process that generates them. This muststart with involving stakeholders at an earlierstage by consulting them on draft proposals andimpact assessments. All impact assessmentsshould specifically address the effect of newregulation on SMEs. In practice, consultationsshould be introduced in a well-planned andwell-targeted way. This will allow businessesto respond adequately, based on evidence.Consultation responses must clearly address

the points raised in submissions. Clear criteria forhandling the variety of responses to consultationsshould also be set up.

• Thoroughly monitor implementation processesand carry out regular fitness checks on existingregulation.

• Continue to ensure timely publication of“roadmaps” regarding planned Commissioninitiatives in order to improve consultation withstakeholders, and allow for improved policycohesion and long-term planning.

KEY RECOMMENDATIONS

• Effective and consistent legislation throughassessing and improving existing rules,instead of creating new legislation.

• Reducing the costs of new legislationby making comprehensive impactassessments for new legislation,which include all additional costs –public and private.

• Continuous assessment of existinglegislation and its implementationwith a focus on reducing its burden,in particular for SMEs.

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ensuRinG tHe effiCient funCtioninGof tHe inteRnaL maRKet

The world is facing enormous challenges to reconcile both growth andincreasing needs with greater competition for raw materials and energy.Already today, European engineering companies are supplying emergingmarkets with resource-effective and sustainable products. An EU marketwith ambitious and appropriate standards, adapted to the global market,would help engineering companies to develop, produce and export theirproducts more effectively.

The single market must be unleashed in the areas of services, energy andthe digital sector, thereby aiming to complete the single market for goodsand services. There is still room for the improvement of the single marketfor goods whilst in the area of services and electrical energy we are moreat a starting point.

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Today, competition is stilldistorted by non-harmonisedlegislation and nationalrequirements.

A single market enjoying the free movement of goods, energyand services is essential for Europe’s competitiveness. Today,competition is still distorted by non-harmonised legislation andnational requirements. This drastically increases the costs forthe development and market introduction of products.

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We therefore encourage member states and the Commission to removeobstacles, refrain from adding new national ones and improve marketsurveillance and custom controls in order to safeguard that the objectivesof regulations are achieved and to foster a level playing field.

Achieving a true single market that is both effective and cost-efficientrequires intense cooperation between Commission services and memberstates, supported by European business organisations. Guidelines mustbe developed jointly by the Commission and member states.

Member states should better coordinate their policy regarding marketsurveillance, risk assessment and the application of technical directives.If member states are not willing to or capable of building up their owncostly competent bodies for these tasks, they should be given theopportunity, for certain products or product groups, to establish commoncompetence centres which are subsequently declared the competentbody for several member states.

KEY RECOMMENDATIONS

• Where new legislation is deemed necessary, regulationsare preferable to directives. Both should leave as little roomfor interpretation as possible.

• The role of the Commission in the enforcement of legislationmust be strengthened.

• Market surveillance must be strengthened to ensure fullcompliance with the legislation of all products on theEU market, whether imported or manufactured in EU,in order to avoid distortion of competition and risks forhealth and the environment. Common competent bodiesshould be permitted.

• Technical regulations should be applied in the same waythroughout the EU. Gold-plated, specific national or regionalrequirements that are costly and hamper competition mustbe avoided.

• As part of the “think small” principle, an EU mechanism shouldbe set up to detect “gold plating” in national transpositions ofEU harmonised legislation, based on transparent criteria.

In order to be able to further invest in new environmentally friendlytechnologies we need a coherent and predictable environment, wherecontinuously changing legislation, through changing the goal posts, doesnot undermine the ability of our companies to recover the investmentthey have made in innovative products, thereby also underminingtheir competitiveness on world markets. Therefore, when proposingnew legislation, the European Commission should balance costs tomanufacturers and their investment cycles against the environmentalbenefits to be gained. It is only in this way that our industry will be ableto reconcile continuously improving the environmental performance ofour processes and products with competing in a fast moving market.

Likewise, when the Commission makes proposals for recasts for existinglegislation, these should take into account already made investments tofulfil existing legislation. Extending the scope must be subject to impactassessment and consider that “new” sectors need due time to adapt.This was not done in the case of with the “Restrictions of Hazardous

enViRonment LeGisLation in suPPoRtof eu industRY’s ComPetitiVenessand inVestment CYCLesOur industry is the key driver of the green and low carbon economythrough the products, systems and technologies we produce. We arethe ones who will enable the “green” (r)evolution in Europe to happenby transforming manufacturing towards a low-carbon, resource-efficient and sustainable twenty-first century economy.

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Substances” (RoHS) and “Waste Electrical andElectronic Equipment” (WEEE) Directives with theirconsiderably extended scopes. These recasts havecaused significant disruption, whereas they wereaimed, at the outset, at improving the application of thedirectives. Similar issues have arisen with the revisionof the “Eco-design Directive” and the “IntegratedPollution Prevention and Control Directive”: the latterultimately resulted in the Industrial Emissions Directive,which was in fact a new legislative project. Suchrecasts must also take into consideration the effortsalready made to comply with recent legislation.

The European Commission has more recently placed“resource efficiency” including recycling at theheart of its 2020 strategy. The instrument of choicefor regulating our industry is likely to be the Eco-design Directive, for which, to date, we are the onlyindustry subject to implementing measures: 35 ofthese are adopted or on-going and more are planned.The Eco-design Directive, which is based on lifecycle thinking, already allows for the regulation of allresource efficiency aspects of energy-related products(ErP), including energy, water and materials, as wellas dealing with the waste phase. We are thereforeparticularly concerned about the potential negativeimpacts of amending the scope of the Eco-designDirective to extend it to non-energy-related productsand place a greater focus on one area alone, that isthe environmental parameters of “recycled content,durability and reusability of products”. This would

again lead to a major paradigm change to legislation towhich a major part of our industry is subject and wouldundermine the holistic approach which is essential formanufacturers whether large or small.

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KEY RECOMMENDATIONS

• Environment legislation should be predictable,consistent and should aim not to underminethe competitiveness of the European industry.

• New legislation should balance the additionalcosts against the environmental impact andeconomic benefits of each policy.

• The Eco-design Directive should continue toapply a holistic approach to the area of Eco-design rather than at any one moment focusingon any specific area. All criteria and proceduralelements of the Eco-design Directive shouldbe applied when considering the use of thisDirective for legislating.

The European Commission has more recently placed “resourceefficiency” including recycling at the heart of its 2020 strategy.

ReseaRCH & deVeLoPment: a neWinteGRated aPPRoaCH CoVeRinGtHe entiRe innoVation CYCLe

A more industry-driven agenda settingWe have witnessed a steady decline in industry participation in past EUFramework Programmes. The attractiveness of the EU’s future fundingprogrammes would improve if the industry was more involved in theagenda setting. Based on our positive experience with the “Factoriesof the Future” Public Private Partnerships (PPPs), we welcome theCommission’s announcement that it will further strengthen PPPs.They represent a pragmatic shift from previous programmes, sincethe roadmaps are drafted by experts coming from both industry andResearch and Technological Organisations (RTOs).

4The policies of innovation, research and technological developmentshall foster a better exploitation of the industrial potential of theEU, as states article 173 of the Treaty (TFEU). Our industry thereforeappreciates that the upcoming Horizon 2020 programme of theEuropean Commission will cover the full innovation cycle from strategicand applied research, demonstration, deployment and access to capital,to market take-up.

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Only by closer cooperation between the public, RTOsand industry can we achieve the goal of having 3%of member states’ GDP dedicated to research andinnovation, of which 2% should be privately financed.

Regarding the Horizon 2020 structure, we welcomeits specific “industrial pillar”. However, we do notunderstand why this pillar should receive the smallestbudget. Moreover, industry involvement should alsoincrease in the other two pillars – societal challengesand excellent science – due to the fact that furthermanufacturing research is also necessary for creatingfuture products and systems related to societalchallenges.

In this context, we therefore confirm our interestin participating in the Task Force for AdvancedManufacturing Technologies for Clean Productionwhich the European Commission intends to set up.

Simplification of rules and funding instrumentsFor years, the industry has asked for a more industry-friendly framework with simplified procedures. WithHorizon 2020, all EU R&D and Innovation fundingwill be put under one common framework. We lookforward to an agreement on common participationrules for all programmes and funding bodies and hopethat flexibility in accounting and reporting will rebalancethe current risk-averse culture which, through theincreasing complexity in the participation rules, has ledto a decrease in the number of companies participatingin most EU funded R&D programmes.

“Smart Specialisation” of regions in researchand innovationWe welcome the “Smart Specialisation” strategywhich allows more structural funds to be invested inresearch and innovation and allows regions to bettertackle the societal challenges they encounter. “SmartSpecialisation” may also result in a closer alignmentbetween European-level research programmesand regional ones. We are convinced that “SmartSpecialisation” can promote industry involvementin research infrastructures, from both a user and

supplier perspective. A region’s strategy for researchand innovation should be aligned with its roadmapfor industrial development. Nevertheless, two pointsrequire special attention:

• Firstly, a clear distinction must be drawn betweenthe ways in which funding can be allocated.Indeed, all financing under “Horizon 2020”should be allocated on the basis of the criteria ofexcellence in research. Research and Innovationin Cohesion policy should not undermine, butrather complement, the aims of Horizon 2020.

• Secondly, synergies between Horizon 2020 andstructural funds must be improved. Interconnectivityof these funding tools according to simple andcoherent procedures should be more attractiveto companies, which often feel disoriented by thecurrent fragmentation of rules among different EUInstitutions and Commission DGs.

KEY RECOMMENDATIONS

• EU R&D and Innovation funding must be moretargeted to industry needs with a focus oncollaborative and pre-competitive research.

• The coordination of research institutes andindustry needs must be improved and PPPsmust be encouraged.

• Synergies between Horizon 2020 andstructural funds must be improved,implementing “Smart Specialisation”in a coherent and determined manner.

• The excellence criteria must be maintainedin Horizon 2020.

• Industry supports the plea of the EuropeanParliament for a Horizon 2020 budgetof 100 billion Euros.

modeRnisinGinfRastRuCtuRes

In 2012, the modernisation of European infrastructures has become evenmore of a key objective for the EU. Since the 1993 “Delors White Paper”the European Commission has recognised that removing bottlenecks inkey network infrastructures, especially in the enlarged EU, would boostour industrial competitiveness. Member states play a leading role hereand should indeed speed up their actions.

Specific actions regarding infrastructures have been detailed in theEurope 2020 flagship initiatives, notably focusing on interconnectionsbetween central and remote areas within the EU. The Commission hasalso proposed specific guidelines such as the “Energy 2020 Strategy”,the “Energy Roadmap 2050”, a Transport White Paper and the e-HealthAction Plan.

5Infrastructures are drivers of growth in Europe, “physically”supporting the four freedoms of the European Union InternalMarket. They are of various natures: transportation and mobility,health infrastructures including e-Health, energy (electricity, gas, oil,hydrogen) and water production, transmission and distribution, safety,intelligent buildings and factories, digital infrastructures includingtelecommunication and broadcast research infrastructures.

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KEY RECOMMENDATIONS

• Energy infrastructures require a new “historical investment”to finance R&D, lighthouse projects and large projects suchas complementing 400Kv lines with high voltage direct currentnetworks.

• Electrical installations require both major modernisation tocope with many new connections to the electricity networkand an improved application of conformity assessment toavoid counterfeiting.

• Safety and security infrastructures require new standards,a better synergy between civilian, defence-related securityand security services, as well as a boost to R&D.

• E-Health must be considered as an investment andreimbursement of e-Health services must be developed,whilst an EU legal framework has to be deployed to supporttelemedicine.

Our industry can provide answers to many of these initiatives. Weproduce the technologies and systems needed for the modernisationof Europe. Our common aim, with European policy makers, is to developfuture technologies and deploy them in Europe first, before subsequentlyshowcasing and marketing our solutions to the rest of the world.

In the Electra II report “A Smart World”, opportunities and challengeswere identified, which apply to an EU policy for all infrastructures:opportunities can be found in making Europe smarter via energy andwater, digital, transport, health and building infrastructures. Thereare obstacles to overcome, such as lengthy permitting procedures,scarce financing possibilities and lack of public acceptance, which theCommission has started addressing with its Infrastructure Package and“NER300”, the joint financing instrument of the European Commission,European Investment Bank and member states for innovative low-carbonenergy demonstration projects. Nevertheless, more needs to be done.

6finanCinG foRmanufaCtuRinG needs

Two particular areas are mentioned:

• Public sector support in the upcoming Multiannual FinancialFramework for 2014-2020, notably through how the resourcesallocated to the Horizon 2020 and COSME programmes areallocated.

• Reinforcing access to the capital markets.

The shift of focus of funding towards more industry supportive fundingprogrammes under the next Multiannual Financial Framework is highlywelcomed. However, in the framework of the proposed Horizon 2020Research, Development and Innovation framework programme, asmentioned previously, it is the planned industry pillar that will receivethe smallest of the three budgets, with science and societal challengestaking the lion’s share.

The increase in the EIB’s lending capacity is also a significant stepforward. We appreciate the reserved funds dedicated to Key EnablingTechnologies (KETs) in so far as this funding is destined to cover allthe KETs, including at a significant level, advanced manufacturingtechnologies. We would, however also have wished to see clearerbudget indications that part of this funding will support the sixth

The Commission’s Communication on industrial policy focusesvery largely on the steps required to reinforce the capital markets.We fully agree that the recovery and growth of European industrywill, among other factors, depend on the availability of capital tocarry out the investments that are needed to achieve growth.

key objective, smart grids. Hi-tech infrastructureinvestment will play an essential role in ensuringthe further integration of Europe and in improvingframework conditions for the manufacturingindustry, including at the level of introducing a morecompetitive market for energy.

While we understand the need to focus on thecapital markets, in particular for larger companies,both in terms of equity and bond markets and, fora wider range of companies for venture capital,bank credit remains for most companies the corefinancing tool. Access to trade credit in the formof overdraft, working capital facilities or revolvingcredit lines is essential to pursue normal businessincluding export orders. While there remain widevariations across companies and country traditions,in particular with regard to the level of debt to equityratios, access to credit has for most companiesbecame increasingly expensive and often moredifficult, in spite of historically low ECB interestrates. Moreover, many companies, in particularfamily-owned companies, prefer to have accessto bank credit due to the fact that recourse tocapital markets practically inevitably leads to a lossof control of ownership. This often gives rise toproblems as the objectives of the capital marketstend to be more short-term than those required ina sector such as ours, where long-term investmentis essential to maintain a technological lead.

Despite this, it would be possible to generate cashflow if policy-makers ensured that payment delayswere to be effectively brought down to an agreedlevel over time (30 days) both by governmentsand private business. The tendency for manylarger organisations (including governments andadministrations) to pay with excessive delay makesthe situation all the more difficult at the level ofsuppliers, the vast majority of which are SMEs.

KEY RECOMMENDATIONS

• First and foremost, establish the right frameworkconditions: a reliable legal system, adequate taxlevels and a low level of bureaucracy. In thearea of corporate finance, manufacturers needan effective and efficient banking system withcompetitive banks, stock and trade exchangeswith strict rules concerning execution andcollaterals, public schemes to support fundingfor new enterprises, R&D and exports.

• Ensure a staged transposition of the Basel IIIrequirements: there are countries introducingBasel III requirements more quickly thanrequired which inevitably means that banks arefacing liquidity issues as they seek to reinforcetheir capital base. This leaves even less moneyavailable for trade credit and working capital.

• Ensure that banks operating in the EU are notrequired to move faster on Basel III than thosein competing manufacturing economies.

• Take the necessary steps to promote easieraccess to trade credit, as traditionally usedby companies, rather than what we see asthe continuing shift towards capital marketinstruments which dilute the equity positionsof entrepreneurs and therefore their ownershipof companies.

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baLanCinG tHe euRoPeaneneRGY PoLiCY

The EU should, however, pay particular attention not to damage Europeanmanufacturing by unnecessarily driving up energy prices for little or noenvironmental benefit. The energy and climate change policies need tobe realigned with economic reality. To restore the balance, future policymust be guided by two key principles: affordable decarbonisation andeffective international leadership.

Affordable DecarbonisationFor the best part of a decade, there has been a significant and growinggap between the energy prices paid by European manufacturers andtheir competitors. By 2011, for example, they were paying nearly twiceas much for electricity and nearly three times as much for gas as theirUS counterparts, with the gap likely to have widened in 2012.

European energy policy needs to strike a balance between providingreliable access to affordable energy, which is critical to thecompetitiveness of many European manufacturers, and exploitingthe business opportunities available through the development of thegreen energy technologies crucial to combating climate change. Thisshould be an essential building block for an industrial strategy thatencourages European manufacturers to invest, grow and competein global markets. The technologies provided for by the engineeringsector are key to reaching the ambitious goals with regard to cuttingdown CO2 emissions, improving energy efficiency and increasing theshare of renewables.

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The cost of green policies is a differentiating factorbetween energy prices in different parts of the world.For companies competing in international markets,policy-related costs are more difficult to pass on tocustomers than global factors like commodity prices.

For the past decade, EU policy has been dominatedby a push for renewable energy. The centrepieceis a commitment to produce 20% of the EU’senergy demand from renewable sources by 2020.There is a case for directly promoting renewableenergy in order to develop a range of low-carbonpower generation options for the future. In thelong-run, however, a market-based approach todecarbonisation is essential to keeping Europeanenergy prices internationally competitive. Goingforward, Europe must pursue a technology-neutraldecarbonisation strategy where the market decidesthe most-cost effective mix of technologies neededto meet environmental objectives. Any future targets

and policies should be based on cutting emissionsfrom power generation rather than the promotion ofa particular technology or types of technology.

Effective International LeadershipGlobal action is needed to address climate change.For the past two decades, the EU has been atthe forefront of efforts to develop a coordinatedinternational response to this pressing issue.And for this, it deserves much credit.

Unfortunately, our efforts to lead by example -adopting tough emission reduction targets in the hopethat others will follow - have gone largely unheededby the international community.

Whilst more countries have, or are exploring,emissions trading and carbon pricing there is still littleor no evidence that comparable action is being takenon by the rest of the world.

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Source: Eurostat, Department for Energy and Climate Change, United Kingdom

Industrial Electricity Prices Industrial Gas Prices

100

80

60

40

20

02004 2005 2006 2007 2008 2009 2010 2011

€/MWh USA EU-2740

30

20

10

02004 2005 2006 2007 2008 2009 2010 2011

€/MWh USA EU-27

As long as this situation persists, the competitiveness of key Europeanmanufacturers and their supply chain will be under threat and there isa very real risk that investment will shift to parts of the world with lessstringent regulations, which would lead to more global emissions, notless. The time has therefore come to change tack.

Whilst a comprehensive global agreement must remain the ultimateobjective, the immediate focus should be on what is achievable inthe near term.

The EU should focus on meeting its existing carbon reduction targets ascost-effectively as possible rather than tacking on ever deeper, unilateral,targets. In parallel, the EU should pursue industry-specific internationalagreements to tackle emissions from energy-intensive sectors. Europeneeds to build support amongst its international partners for sectoragreements as stepping stones towards a global agreement.

KEY RECRECOMMENDATIONS

• Europpean energy policy needs to strike a balance betweenprovididing reliable access to affordable energy and exploitingthe bussiness opportunities from developing the green energytechnoloogies.

• Any future te targets and policies should be based on cuttingemissions frorom power generation rather than the promotionof a particularr technology or types of technology.

• The EU should fo focus on meeting its existing carbon reductiontargets as cost-effeffectively as possible rather than tacking onever deeper, unilatereral, targets.

• Europe needs to build susupport amongst its internationalpartners for sector agreemements as stepping stones towardsa global agreement on reducincing carbon emissions.

7 baLanCinG tHe euRoPean eneRGY PoLiCY

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ensuRinG ComPetitiVeLabouR maRKets in euRoPe

To strengthen the international competitiveness of the European manu-facturing sector, we must ensure that policies and regulations supportdynamic, flexible and inclusive labour markets where people possessthe right skills.

There is evidence that countries with flexible labour markets have betterweathered the storms of the crisis and for this reason many less wellperforming countries have been or are currently introducing major labourmarket reforms. Reforming labour markets remains in the first instance anational responsibility. Those countries with high levels of unemploymentand in particular unacceptably high levels of youth unemployment arenow profoundly reforming their overregulated labour markets. This is

8Manufacturing companies are more exposed to internationalcompetition than those in other sectors. Globalised markets areeasily accessible to businesses operating in economies withmuch lower labour costs where the regulatory burden is farbelow that experienced in Europe. For European manufacturersto compete, they therefore need to make considerableinvestments in skills, technology and products and have togo through a permanent and evolutionary process of change.

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why it is important that the EU does not introduce new measures whichimpede the effects of many individual countries to make their labourmarkets more flexible and thus more internationally competitive.

European industry has to be able to respond to changing technologiesand economic and societal demands. An environment that allows for swiftadaptation, transformation and restructuring supports this. In line withthis, article 173 TFEU provides for that the actions of the Union and themember states shall be aimed at “speeding up the adjustment of industryto structural changes”. Indeed, facilitating growth and employmentis a vital part of a well-functioning single market. Due to the currentvolatile economic circumstances, rapid technological developments,the intensified globalisation of markets, lean manufacturing and changingemployee needs, more flexible forms of employment contracts havebecome a necessity. In addition to fulltime and permanent work whichrepresents the vast majority of employment contracts in manufacturing,there is an increasing demand for a diversity of working arrangements,including part-time, fixed-term and temporary agency work, from bothemployers as well as individuals. Such employment contracts can alsoserve as stepping stones onto the labour market and contribute to reducingthe ever-increasing structural unemployment. Furthermore, due todemographic developments, it will become increasingly important to tryto retain the know-how of older workers in companies for as long aspossible and, thus, address the issue of an ageing workforce appropriately.This can be achieved through the introduction of individual arrangements,based on part-time retirement or intelligent-job rotation models.

Alongside an increasingly consolidated European Single Market, a newcontext for industrial relations is emerging, having a considerable impacton our national and regional collective bargaining systems. Over the pastyears, the social partners of the metal, engineering and technology-basedindustries in many European countries have adapted their collectiveagreements by introducing innovative measures that offer more roomfor tailor-made solutions at company level. It is important that thisdevelopment is fully recognised and respected at European level.

With regard to the current discussion of wage-setting at European levelin the context of the new European Economic Governance, we agree withthe conclusion of the Euro Plus Pact that wages have to be assessed vis-à-vis productivity in the long-term. However, we underline the need forthe European institutions to fully respect the different responsibilities atnational, regional and company level in the area of wage setting.

The introduction or promotion of minimum wages at European level woulddisregard the responsibility of social partners. In addition, it would furtherreduce existing flexibility that companies and economies are dependent on.

KEY RECOMMENDATIONS

• Commit to controlling additional labour costs (as mentioned inthe Commission’s 2012 Employment Package), so that peoplein Europe are not priced out of their jobs.

• Commit to see through different labour market reforms to createmodern, effective and employment friendly social protectionsystems, which will establish an efficient link between rightsand obligations.

• Apply at EU and in particular the national level the underlyingidea of Flexicurity and change from the concept of job protectionto employment protection.

• TakeTake into account national efforts of reforming overregulatedlabour marr markets before introducing EU-level initiatives such asregulation on con company restructuring or posting of workers.All stakeholders shouhould heed the principle of article 173 TFEUstating that “the Union and and the member states shall ensure thatthe conditions necessary for thr the competitiveness of the Union’sindustry exist”, and contribute to fao facilitate swift processes ofadjustment of industry to structural cha changes.

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maKinG nationaL soCiaL seCuRitYsYstems futuRe PRoof to maintainComPetitiVeness and soCiaLCoHesion

9The national social security systems need to be revised and mademore sustainable to respond to the challenges of the ageingworkforces, longevity and changing career patterns. In general,Europe today already has highly developed and expensive socialprotection systems in comparison with the rest of the world. Asthe World Bank states in its 2012 report “Golden Growth”, “Europespends more on social protection-pensions, unemployment insurance,and social welfare than the rest of the world combined (overview,p. 18). For many countries in Europe this has become unaffordable.Combined with demographic pressures and weakened workincentives (in addition to considerably lower effective working hoursand early retirements) this fiscal burden is now a drag for growth.Europe has to make big changes in how it organises labour andgovernment (overview, p. 21).”

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KEY RECOMMENDATIONS

• Adapt national security systems to demographic changesand new working patterns.

• Reduce ancillary labour costs.

• Keep occupational pension schemes simple and affordablefor companies.

We would like to underline the importance of the revision of the nationalsocial security systems. The allocation of monies in national socialsecurity systems, in particular in times of excessive deficits, has to bedone in a more effective and targeted manner.

With regard to the pension systems in Europe, we share the EuropeanCommission´s view in the White Paper on Pensions that occupationalpension schemes will be of increasing importance to secure adequateold-age provisions in all member states. However, we strongly call onthe Commission not to apply Solvency II-like own-funds requirements tooccupational pensions as is proposed in the revision of the IORP Directiveas this would burden the concerned companies, hinder investment andinnovation and reduce the pension claims of the affected employees.

addRessinG tHe sKiLLs sHoRtaGeand ComPetenCe defiCits of tHeeu manufaCtuRinG industRY

10Lifelong learning for competitiveness and employabilityWith constant developments in innovation and technology,changing consumer demands and global competition, companiesin the manufacturing industry are experiencing rapidly changingcompetence needs, invariably requiring greater levels of individualachievement. Taken together with economic and demographictrends, as well as a current skills gap and insufficient commitmenttowards investment in science, technology, engineering andmathematics subjects, sourcing the right competence has becomea pressing challenge for many companies in our industry.

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The ability of companies and individuals to adapt to future competenceneeds, as well as the education and training systems’ ability to provideservices that match labour market needs will be central to Europeanmanufacturing companies’ competitiveness and individual employability.We therefore need to ensure that the right framework conditions are inplace for education and training providers to be able to deliver adequateskills, knowledge and competence (SKC) development measures and forindividuals to be able to effectively engage in education and training froman early age on, throughout their professional careers.

KEY RECOMMENDATIONS

• Better matching of skills and labour marketneeds: promote lifelong learning (as a sharedresponsibility) from primary school onwards anda culture of practical learning in primary and lowersecondary education in order to introduce pupils toscience, technological and manufacturing subjectsand to their potential applications in differentprofessions and vocational education and training(VET) early on.

• Focus on excellence in, and impact of, vocationaland higher education: promote a shift in settingtargets for education and training provision frompurely quantitative towards focusing on quality,the relevance and impact of education, forexample by sharing information of quality andimpact-oriented funding models for educationand training or facilitating strategic partnershipsbetween industry and education.

• Facilitate the development of human resourcesstrategies in SMEs: promote investment instrategic management planning and developingkey features of human resources developmentstrategies, specifically promoting the participationof an increased number of SMEs in the EUcooperation programmes in education, trainingand R&D&I.

• Give priority to the establishment of a ValueAdded Manufacturing Knowledge and InnovationCommunity (KIC) of the European Institute ofInnovation and Technology (EIT).

27manifesto

Our industry welcomes the progress made sofar by the European Institute of Innovation andTechnology (EIT) and the planned activities outlinedin the EIT Strategic Innovation Agenda. However,we disagree with a strict “first wave” and “secondwave” approach. A Knowledge and InnovationCommunity (KIC) on Added Value Manufacturing hasbeen proposed, but is not planned to be launched

until 2018. We consider that this KIC would presenta real chance to enhance innovation and educate ahighly skilled workforce with a practical experienceof industry and R&D. For this to be effective the KICshould be brought into operation as soon as possibleand well before 2018. Below we have listed the mainissues along with recommendations we believea European industrial policy should support.

oPen WoRLd maRKets foRGoods and RaW mateRiaLs

For the future of the engineering industry it is crucial that companies canbenefit from the opportunities arising in the emerging and developingmarkets, such as in China, India, Southeast Asia, Russia and LatinAmerica. However, in the aftermath of the financial crisis, protectionisttendencies have increased in almost all parts of the world. Therefore, theEU needs a strong trade policy directed towards open global markets andfurther liberalisation, based on the following principles:

• Fight against protectionism including national government subsidies,and an increase in tariff and non-tariff barriers.

• Promote multilateral negotiations: a breakthrough in WTOnegotiations is urgently required.

• Use bilateral trade agreements when multilateralism fails:focus on mutual removal of all industrial duties.

Multilateral and bilateral trade negotiations – better accessto the world’s leading and developing marketsWe represent an industry that is a world leader in many areas oftechnology and manufacturing. Our companies are highly export oriented,and their success depends to a major degree on open internationalmarkets. We count on European policymakers to be the key drivers ofinternational cooperation and to push for further international tradeand economic agreements - multinational, bilateral or regional. Thiswould result in greater access to the world’s largest and most dynamiceconomies and consequently to further growth and employmentopportunities in Europe.

11

• Reduce non-tariff barriers worldwide: with theaim of achieving convergence of individualcountry standards and certification requirements.

• Address other policy domains that hindercompanies: investment rules, labour mobility,access to public procurement markets,energy security.

• Promote the protection of intellectual property:implementation and effective enforcement ofIPR legislation.

Raw materialsThe European Union is currently facing a high degreeof dependency on third countries for the supply ofraw materials. Certain raw materials are vital for thedevelopment of technologically sophisticated productsand are hard to substitute, which is why the securityof their supply chain is critical to European industry.European engineering companies require many differentraw materials and resources for manufacturing,including energy, chemicals, ferrous and non-ferrousmetals, minerals and plastics. Furthermore, electricaland electronic engineering companies, as a high-technology sector, particularly depend on rare earths.

For the above-mentioned reasons, we support EUpolicies that tackle these challenges and lead to thetrading of raw materials free of any WTO-incompatiblerestrictions, such as bans, quotas, duties and non-automatic export licences. In order to preservecontinuous, competitive, free, secure and fair accessto international raw material markets for Europeanengineering companies, we urge the Europeaninstitutions to:

• Address barriers to trade and unfair competitionat EU and international levels and avoid that EUaction in this field leads to additional increasesin raw material prices.

• Use all bilateral negotiations on free tradeagreements or WTO accessions to negotiate non-discriminatory access to raw material markets.

• Support industry-driven activities on resourceefficiency and companies’ own resourceefficiency projects.

• Support research and innovation with clearframework conditions, better access to finance forcompanies, promote innovation partnerships andPublic-Private Partnerships. Use R&D efforts forbetter recycling, promoting substitution processesfor rare materials and investment in research anddevelopment of technologies for the recyclingof raw materials as well as for the efficient andeconomic use of raw materials by SMEs.

• Ensure a harmonised and sound implementationof the Waste Shipment Regulation acrossmember states, as well as ensuring effectiveenforcement and control of shipments in orderto combat illegal exports.

29manifesto

KEY RECOMMENDATIONS

• EU trade policy should focus on open globalmarkets and access for EU industries to emergingand developing markets, such as in China, India,Southeast Asia, Russia and Latin America.

• We prefer a multilateral approach - bilateralapproaches are second best.

• The EU must insist that raw materials tradeis free from WTO-incompatible restrictions.

30 manifesto

As the industry driving the transition towards a cleanand green economy, we support the policy aimsoutlined by the Commission and many of the actionsproposed. Nevertheless, we feel it is essential toremember that the development of an industrial policyfocusing only on the “green and clean economy” as aconcept must be firmly anchored to the real world ofindustrial production, value chains and products: thegreen and clean economy is the natural evolution ofthe EU’s economy which is being brought about bythe products, technologies and systems manufacturedby our industry and applied or used by our customers,whether they are businesses or consumers.

Finally we would like to stress that what will countin the end is how far the Commission and memberstates go beyond words and really apply a coherentpolicy which attracts companies.

Today the EU has a mix of industrial, internal market,research, social, energy, consumer and environmentalpolicies which are often not coherent with oneanother and effectively have ended up discouraginginvestment in the EU.

Now the EU institutions, led by the EuropeanCommission must at last aim to achieve and applya coherent policy which does attract industrialinvestment in practice: the success or failure ofthis policy will have a lasting impact on Europeand our position as Europeans in the world.

ConCLusionsOver the last few months, Europe’s focus has been on re-establishing budgetary orthodoxy, essentiallythrough the introduction of austerity measures. Such an approach, while necessary, is clearly notsufficient. Indeed, for austerity to be acceptable to citizens, it needs to be accompanied by hopes ofbetter times ahead, which only growth can provide. It was therefore time that the EU should focus onceagain on wealth creation. In this context, we very much welcome the Commission’s recent industrialpolicy Communication which stresses that industry is vital to economic recovery and has a clear focuson manufacturing, growth and job creation.

ORGALIME and CEEMET’s industry plays a strategicrole in the economy of Europe through the products,systems and technologies they manufacture and theintegrated value chain the industry forms, startingfrom producers of ferrous and non-ferrous metalsin the primary transformation and metals recyclingindustries, through the supply of components,equipment and systems, to the final supply of bothconsumer durables and capital goods and services toall sectors of the economy including:

• The primary transformation industries -foundry,steel and non-ferrous metals sectors.

• The transport industry including the automotive,aeronautics and rail sectors.

• The engineering industry itself.

• The energy sector production, transmissionand distribution industries.

• Agro-industry, agriculture and the food industryin general.

• The major processing industries including thechemical, petrochemical and plastics industries.

• The housing and buildings sector.

• The medical sector.

This is also the industry that provides the technologicalsolutions to the societal challenges facing Europe,whether at the level of climate change, sustainableconsumption and production, demographic change,urbanisation or energy security.

about Ceemet and oRGaLime

CEEMET (Council of European Employers of the Metal, Engineering and Technology-Based Industries) isthe European employers’ organisation representing the interests of the metal, engineering and technology-based industries. Through its national member organisations it represents 200,000 companies acrossEurope. The vast majority of them are SMEs, providing over 13 million jobs of direct employment.

ORGALIME, the European Engineering Industries Association, speaks for 37 trade federations representingsome 130,000 companies in the mechanical, electrical, electronic, metalworking & metal articles industriesof 22 European countries. The industry employs some 10.2 million people in the EU and in 2011 accountedfor some €1,666 billion of annual output. The industry not only represents some 28% of the output ofmanufactured products but also a third of the manufactured exports of the European Union.

Photos courtesy of: Airbus, Arlberger Bergbahnen and VDMA

membeRs

Council of European Employersof the Metal, Engineering andTechnology-based industries

MASOC

LATVIA

LINPRA

LITHUANIA

NORSK INDUSTRI

NORWAY

ILTM

LUXEMBOURG

FME-CWM METAALUNIE

THE NETHERLANDS

PIGE

POLAND

AUSTRALIA

AUSTRALIAN INDUSTRY BASSEL BBCMB

BULGARIA

AGORIA

BELGIUM

EGMF

AUSTRIA

FEEI FMMI WKO DI

DENMARK

HUP

CROATIA

THE FEDERATION OF FINNISHTECHNOLOGY INDUSTRIES

FINLAND

FIEEC FIM

FRANCE

UIMM VDMAGESAMTMETALL WSM ZVEI

GERMANY

IEEF

IRELAND

ANIE ANIMA

ITALY

ASSOLOMBARDA FEDERMECCANICAGAMBICA

GREAT BRITAIN

EEF

BEAMA EAMA

GREAT BRITAIN

SWISSMEM

SWITZERLAND

MESS

TURKEY

TEKNIKFÖRETAGEN

SWEDEN

GZS-MPIA

SLOVENIA

CONFEMETAL SERCOBE

SPAIN

SEIFSA

SOUTH AFRICA

EUROPUMP

EUROPEAN SECTOR ASSOCIATIONS

EFCEMCEIR CELMA

AIMMAP

PORTUGAL

ANEME

MAGEOSZ

HUNGARY