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German Steel Federation Welcomes the EU Action Plan, but also Sees Risks

At the same time, WV Stahl is disappointed and concerned about this initiative by the Brussels’ authorities. “The Plan contains intervention points for ensuring the competitiveness of the steel industry, e.g. in the area of research and development,” according to Hans Jürgen Kerkhoff, President of the German Steel Federation in Düsseldorf/DE. “But, unfortunately, there is a lack of concrete information on how and when political burdens resulting from Europe’s energy and climate policies are to be dismantled. Statements on the shape of the emission rights trading scheme after 2020 remain vague.” The steel industry in Germany is also particularly concerned that the Action Plan contains no clear acknowledgement regarding undistorted competition on the internal EU market: “Some formulations give the impression that the problem of excessive steel capacities in Europe should be solved using interventionist instruments,” fears the Federation’s President. In fact, however, in a market economy it is companies themselves that individually, and in competition, decide what capacities could permanently assert themselves on the market. As a steel and industrial base, Germany is fundamentally better prepared for the upcoming market shake-out than many of their European competitors. The effective capacity utilization of the steel industry in Germany is currently 85 % – considerably higher than the EU average (71 %) – in part because the companies here are particularly closely integrated in powerful industrial value-creation and innovation networks. The German Steel Federation has clear expectations of the European Commission: there must be no distortion of competition as a result of state aid. Moreover, it demands that the Plan’s fundamental acknowledgement of the value of increasing the competitiveness of the steel industry must now be concretized – because the steel industry in Europe will play an important role in achieving the EU’s declared aim of increasing industry’s contribution to European gross value creation to 20 % by 2020. The association maintains that a prerequisite for this was a political framework upon which industry could rely and identical international competitive conditions. In addition, national and European energy policies had to be better co-ordinated. (7/2013)

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