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Industrial transition: regional and local leaders warn against risks for SMEs if the territorial impact is neglected  

The European industrial policy and its impact on regions and cities, including strategies to reskill workers in the framework of the green transition, the refo​rm of the EU economic governance framework and the improvement of the public sector interoperability, were the main topics discussed during the meeting of the Commission for Economic Policy (ECON) of the European Committee of the Regions (CoR) on 15 February.

The transition towards climate neutrality implies many challenges for local and regional economies, especially for those with a high number of workers in energy-intensive industries. The new Inflation Reduction Act recently adopted by the US government prompted the European Commission to table a Green Deal Industrial Plan in order to support the fast transition to climate neutrality of EU industries. However, major concerns remain related in particular to the automotive sector and the possibility of prioritising EU purchases in public procurements in the face of competition from China and the United States, local leaders warned during a debate.

A new OECD report published today (15 February) and presented to the ECON members identifies 41 European regions as particularly exposed to the transition towards climate neutrality. The reason is the combination of their high employment shares and emissions per capita in the most energy-intensive sectors, such as coke, refined petroleum, paper and pulp manufacturing. “These exposed regions will have to decarbonise production assets while at the same time capitalising on opportunities to ensure a just transition for their workers, for example through reskilling”, highlights the report. Many of the identified regions are in northern and central Europe.

During the ECON meeting, local leaders also had a first exchange of views on reform of the EU economic governance framework with Elio di Rupo (BE/PES), Minister-President of the Wallonia Region, who is the CoR rapporteur on the topic. Representatives from the European Commission, the European Fiscal Board and academia joined the debate, during which ECON members criticised the Commission’s proposal for a reformed EU economic governance framework because of its lack of local and regional dimension. Members recalled that local and regional authorities are responsible for one-third of total public expenditure and more than a half of public investment in the EU. Some of them asked to set a “golden rule” which excludes strategic investments from the debt calculation, like the co-financing of cohesion projects. The rapporteur, Elio Di Rupo, stressed the need to make the debt-reduction path sustainable and called for more fiscal flexibility when regions and cities are investing in local projects that simply implement decisions taken at national or European level, such as the achievement of climate-neutrality by 2050.

In addition, ECON members held a first debate on measures to improve public-sector interoperability across the Union, which will feed into the opinion drafted by Michele Pais (IT/ECR), President of the Regional Council of Sardinia. Interoperability is particularly relevant for local and regional authorities given that they are the key actors that manage and provide network or information systems that enable public services to be delivered electronically. Members highlighted that especially peripheral regions, such as island or mountain regions, are often not properly integrated in mechanisms of digital cooperation between Member States. Their distance to other European regions and cities has to be considered when establishing effective coordination at all levels of government in providing public services. Furthermore, the EU Commission’s legislative proposal on the Interoperable Europe Act may require significant human resources and a reskilling of the workforce in order to equip them to carry out the digital tasks that will fall to regions and cities.

Both opinions are scheduled for adoption at the 19 April meeting of the ECON commission.


The ECON meeting was organised the day after the meeting of the European ministers for economic and financial affairs during which they discussed on the EU economic governance review. Ministers may reach a first agreement on the reform in the coming weeks, to be submitted to the EU heads of State and governments ahead of European Council meeting on 23-24 March.

This is the third time that Elio Di Rupo has served as the CoR’s rapporteur on the economic governance review. The two previous opinions drafted by the Minister-President ​were adopted in December 2020 (“ Economic governance review”) and in April 2022 (“ The EU economy after COVID-19: implications for economic governance”).

In November 2022, the European Commission presented its proposal for a reformed EU economic governance framework, in order to make it simpler and more effective. CoR member Di Rupo and the President of the European Committee of the Regions, Vasco Alves Cordeiro, commented the proposal, highlighting that this should address the need for public investment in cohesion and sustainability.

The Interoperable Europe Act was proposed by the European Commission in November 2022 and introduces a cooperation framework for public administrations across the EU that helps build a secure cross-border exchange of data and agree on shared digital solutions.

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