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EU industry’s green transition in spotlight at ECON meeting  

The impact on regions and cities of the EU's policy to reduce reliance on imports of critical raw materials, reducing dependency on net-zero industry technologies and the achievement of a just transition in the automotive industry were amongst the main topics discussed during the meeting of the commission for Economic Policy (ECON) on 7 June. ECON members also adopted a draft opinion on the reform of the EU Stability and Growth Pact, calling for European fiscal rules to be more effective and have greater democratic legitimacy. 

Members of the ECON commission voiced support for the more country-specific approach of the recent European Commission proposal for new economic governance rules. However, they insisted that the involvement of local and regional authorities in the definition of the new national mid-term fiscal plans must be mandatory. The adoption by the CoR commission comes just one week before national ministers assess the proposed reform of the economic governance framework at the Economic and Financial Affairs Council  

The rapporteur Elio Di Rupo (BE/PES), Minister-President of the Wallonia Region, said: "The status quo is not an option. Reform of the EU's economic governance is inevitable given the impact of the COVID-19 pandemic and the war in Ukraine. There is a need for investments into the green and digital transitions of 650 billion per year over the next decade and almost 200 billion per year for social infrastructure. To strengthen public investment, the very least would be to exempt all expenditure incurred by Member States and local and regional authorities as part of Cohesion funds co-financing and Union programmes from fiscal surveillance." 

The opinion will be voted upon at the Plenary session of the CoR in October. For more information, please consult the related press release here. 

During the meeting, ECON members debated on the draft opinions "Net Zero Industry Act", prepared by Mark Speich (DE/EPP), State Secretary for Federal, European and International Affairs and Media of the State of North Rhine Westphalia, and "Critical Raw Materials Package" drafted by Isolde Ries (DE/PES), Mayor of West Saarbrücken District. Members supported reducing dependency on net-zero energy technologies through the circular use of resources, but stressed that regional dependencies should be identified, as well as the consequent need for regions to take action to build sustainable and innovative value chains. Moreover, rising demand for raw materials also means growing dependence on countries rich in such materials. Many producer countries do not meet the EU's environmental and social standards. At local level, this can lead to poorer mining conditions for people and the environment, and even military conflicts and corruption. It is therefore crucial to strengthen the preparedness of local and regional authorities for possible disruptions in supply chains and to develop reserves in the European Union to achieve strategic autonomy for critical raw materials.  

ECON members further discussed the just and sustainable transition for automotive regions which is the key concern of the Automotive Regions Alliance. They highlighted that political and financial support from the EU for the automotive regions is needed in order to ensure a just and socially sustainable transition to a climate-friendly economy. The Alliance calls for the establishment of a European mechanism for the automotive regions comparable to the Just Transition Fund which is particularly important for the upskilling of workforce in this industry. On Monday, the Chair of the Automotive Regions Alliance and Saxon State Minister for Regional Development, Thomas Schmidt (DE/EPP), was invited by Thierry Breton, Commissioner for the Single Market, and Nicolas Schmit, Commissioner for Jobs and Social Rights, to discuss the social impact of the ongoing transition in the automotive industry and made clear the demands of the Alliance.  

Finally, members of the ECON commission had a first exchange of views on the draft opinions "EU Cyber Solidarity Act and Digital Resilience", by Pehr Granfalk (SE/EPP), Member of Solna Municipal Council, and "2022 Annual Report on Competition Policy", prepared by Antonio Mazzeo (IT/PES), President of the Regional Council of Tuscany.  

Background:  

The Automotive Regions Alliance is a political network of regions committed to the successful transition of the European automotive and supply industry. The CoR is currently preparing a draft opinion on the just and sustainable transition for automotive regions, by rapporteur Sven Schulze (DE/EPP), Minister for Economic Affairs, Tourism, Agriculture and Forestry of Saxony-Anhalt, which aims to contribute to the ongoing transition process and to develop strategies on how these regional processes can be supported through a multi-level dialogue and EU Cohesion Policy. 

As a response to the American Inflation Reduction Act, the European Commission published its proposal for a Net-Zero Industry Act (NZIA) on 16 March. The proposal is part of the Green Deal Industrial Plan with the overall goal of enhancing the competitiveness of Europe's net-zero industry and supporting the fast transition to climate neutrality. The NZIA aims to scale-up clean tech manufacturing in the EU with the ambition that the EU's strategic net-zero tech manufacturing capacity should reach at least 40% of the Union's annual deployment needs by 2030. 

The Critical Raw Materials Act, proposed by the Commission on the same day, leverages the strengths and opportunities of the Single Market and the EU's external partnerships to diversify and enhance the resilience of EU critical raw material supply chains. The Critical Raw Materials Act also improves the EU capacity to monitor and mitigate risks of disruptions and enhances circularity and sustainability. 


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