Conference on the strategic economic
autonomy of the European Union

The Covid-19 pandemic has exposed the vulnerability of the European economies in the face of the disorganisation of global production processes. Difficulties procuring essential products, such as ventilator components, masks and curare, as well as fears of shortages of everyday products and food and hygiene products, have highlighted our dependency on global trade flows in many sectors.

It is far from sure that the procurement difficulties would have been as massive and systematic thirty years ago, when industry represented a larger share of European economies. The impression of a loss of know‑how, resulting from imprudent strategic choices, has gradually taken hold in public opinion in Europe.

In addition to these considerations relating to economic policy, geopolitical fears have also emerged, as authoritarian countries like China have been exhibiting their technological independence. Although interdependence is a phenomenon that is essential to globalisation, with many economic benefits, an asymmetrical relationship seems to have been established to the detriment of the productive fabric and jobs in the most open countries. This has been underscored by the lasting repercussions of the pandemic, with shortages still being experienced in certain sectors.

Strategic autonomy in the industries of the future

The public health crisis has provided further proof, if any were needed, that industry is the foundation of our nations’ economies and resilience.

The sectors essential to our future are not only those that will be capable, in the years to come, of developing breakthrough technologies to allow for instance the widespread storage and use of hydrogen for transport, the mass production of batteries for electric cars or the storage of the carbon generated by metallurgical industry processes.

Europe’s industrial strategic autonomy will also involve all the sectors that guarantee the smooth day-to-day running of our societies and economies, even at times when the globalised economy is seeing a cyclical downturn. By this we mean the health industries, of course, which produce essential active ingredients for medicines, but also the manufacturing of electronic components indispensable to the automotive or machinery industries, the importance of which has been so well illustrated by the current chip shortage. 

How can this effort to construct Europe’s strategic autonomy be implemented in the industrial sector?

Provide large-scale support for the emergence of new industrial activities by means of cross investment by national governments and Europe? Reinforce resilience in value chains by diversified partnerships? Improve the attractiveness of European production sites through tax policy and adapted regulations? No doubt all of these at the same time. With what tools, what actors, at what level?

These are the questions essential to the implementation of a true European industrial policy.

Among the instruments that will enable the development of European companies and industries, the question of the reinforcement of the legal arsenal to guarantee the conditions of fair competition and protect the productive know-how and infrastructure of foreign holdings or acquisitions, will be at the heart of this round table debate.

Strategic autonomy in the energy field: the example of rare metals.

The energy transition implies the production and consumption of decarbonised electricity and the progressive phasing out of fossil energies. Whereas traditionally the emphasis has been on the security of energy supplies, the energy transition also means focusing on rare metals, which are indispensable components in renewable energies (wind and solar power) and electric batteries. These metals include in particular copper, aluminium, lithium, cobalt, nickel and rare earths.

This use of rare metals poses four economic challenges.

Firstly, it carries with it a risk of inflation, the prices of copper and aluminium having risen sharply over the last few years.

In addition, it creates a risk of dependency on the producer countries, whose economic, social and environmental standards are often lower than European standards. Broadly speaking, half of copper is produced in Chile and Peru, half of aluminium comes from China, and half of cobalt is produced in the Democratic Republic of the Congo (DRC).

Another important point is that this use of rare metals is a source of negative externalities, such as greenhouse gas (GHG) emissions, environmental pollution or nuisance for local populations. For example, the production of aluminium alone generates 1% of all the world’s GHG emissions.

Finally, this use of rare metals must become part of the circular economy, with an emphasis on local production, but also collection and recycling of waste. There remains much to be done in this respect, with only 10% of lithium batteries being recycled, for example.

This dependency was first identified by the European Commission at the beginning of the 2010s, but it has taken a worrying turn since China has taken control of virtually all the resources of rare earths. The reinforcement of mining potential in Europe or the improvement of recycling technologies will play an essential role in the European Union’s strategic autonomy in this area.

Proof of the growing involvement of public authorities, France has, for example, adopted an objective of mining sovereignty as part of its reform of the Mining Code under the “Energy‑Climate” Law of August 2021, which sets the following objectives: “to develop the attractiveness of mining on national soil whilst ensuring demanding environmental and social requirements are met, to repatriate value chains, to secure channels of supply, to guarantee the knowledge, traceability and re-use of subsurface resources and to reduce France’s dependency on imports.”