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EU – Updating the 2020 Industrial Strategy

On May 5th, 2021, the European Commission addressed the EU Parliament, the Council and other European institutions, calling the attention on the need to update the "2020 New Industrial Strategy: Building a Stronger Single Market for Europe's Recovery" ("2020 Industrial Strategy").

The 2020 Industrial Strategy (firstly published the day after the WHO declared the CoViD-19 as a pandemic) contains – inter alia – a dedicated strategy for small and medium enterprises ("SMEs") aimed at improving their positioning in the single market.

The need for an update of the 2020 Industrial Strategy came from the acquired awareness of a lack of tools to face emergencies at EU level, as well as the absence of cooperation and coordination between national systems. In addition, the pandemic revealed the vulnerabilities and downsides of a global value chain, showing how economy – at all levels – results to be deeply integrated, both among Member States and between the EU and foreign countries.

This year of health and economic crisis, which has strongly affected the EU market, highlighted the need to update the current EU system of free movements of persons, goods, services and capital, by making the single market better equipped to deal with such kind of crises.

In particular, the Commission focused on three different SMEs-related issues: (a) the extreme inter-dependencies resulting from a global value chain; and (b) the need for a green and digital transition; and (c) the insolvency risk of SMEs.

With respect to the first issue, the EU market presents different types of dependencies, both of internal and external nature. For instance, the strategic dependency related to certain raw materials or chemicals (which are available only in specific geographical areas), which does not allow any further diversifications in the EU market. In that respect, the Commission, in areas of strategic importance, is trying to identify some public policy measures helping industries to manage these dependencies and to improve their capacity needs.

In the updating of the 2020 Industrial Strategy, the Commission supports the digital and green transformation for business, and in particular for SMEs, which may leverage such transitions to improve their profitability. Furthermore, the Commission proposed a greater support from the EU in the increasing situations of crises of SMEs, introducing different instruments to manage and to support enterprises in distressed situations. 

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