The European Commission is concerned that Europe cannot prosper without a strong industrial base. Industry spurs 80 percent of private innovation, produces three-quarters of exports and creates many jobs, it noted on Wednesday, releasing two reports on the subject. They cite the progress Greece has made, the country’s challenges, as well as problems common to all EU states.
The EU has set a target of industry production contributing 20 percent of the bloc’s GDP by 2020. But it is falling short. The Commission noted that industrial production had dropped to 15.1 percent of GDP in the summer from 15.5 percent a year earlier. In Greece, industry corresponds to 9.7 percent of GDP, from 10.9 percent in 2000 (when the EU average was 18.5 percent). The Commission noted: “The cost of energy is increasing in almost all member states, contributing to the deindustrialization of Europe. Big roadblocks are also access to finance and a drop in investment in almost all member states. For European industry to start flourishing again, public administration performance needs to be significantly improved as well as the link between schools and companies. Further efforts should be made to boost innovation close to the market.”
This applies to the EU as a whole. The Commission noted that whereas Greek labor costs had risen 50 percent in 1999-2009, in the past three years they had dropped 20 percent. It stressed that Greece is trying to redirect its economy from consumption to investments and exports. Whereas the national target is for exports to reach 16 percent of GDP in 2015, in 2012 they were already at a record 13.8 percent. Progress has been made in several areas (including the fact that the 11 days needed to start a business are below the EU average of 14 days), but weaknesses in public administration and the regulatory framework create obstacles to entrepreneurship, productivity and competitiveness. Uncertainty and economic difficulties, mainly due to the credit crunch, are further hindrances. Reform to the public administration and the regulatory framework must be priorities, the Commission noted.
Reading the findings, I remembered a recent visit to the island of Syros and its most interesting industrial museum in the main town, the elegant Ermoupolis. Within a few halls and their exhibits in an old paint factory, one can see how refugees from the burning fronts of the War of Independence (1821-1830) mobilized their will, inventiveness and persistence to create an important and rich new town, a new home. They started out providing naval and banking services to the shipping trade; when this market dried up, they turned to industry and shipowning, then to shipbuilding, and so on. In close to two centuries, with each crisis and collapse, they found something new at which to excel, with which to get by. Today, we should not forget that however much the crisis may hurt us, however it may frighten us, with will power and persistence we will force our way forward.