Abstract

This paper proposes three propositions for the future of European industrial policy, based on a discussion of the Report 'An Agenda for a Growing Europe' (Sapir et al., 2004). My first proposition is that the growth gap between US and EU indeed exists, it is not a statistical artefact, in spite of the considerations by Blanchard (2004) and others. The competitive pressure of Asian economies compels Europe to react to such gap in the short term. Second, the EU enlargement offers a growth potential, beyond the narrow horizons of national capitalism in the EU member states. Economic integration with the enlargement countries should be firmly pursued, and public investment in infrastructure, cofinanced by EU structural funds will help. This policy, however, is not sufficient to fill the gap with the US. Third, I suggest that a European industrial policy should not be based only or mainly on products market liberalization. An ingredient in an EU industrial policy should be a long term strategy for European-wide public procurement policy, not just for infrastructures, but for hi-tech industries as well. This policy would need a delegation of national funds to supra-national spending agencies, looking at the US experience. We suggest a more radical reform of the EU budget as the one proposed by Sapir et al. (2004).