Confindustria in Italy, MEDEF in France, BDI in Germany: the industrial associations estimate the impact of the crisis on the economy in their countries and propose concrete actions for the restart

The emergency Covid-19 brought a new historical phase of deep change that the social, political, economic system is trying to face.

Which is the situation in main European countries? Which proposals could help the economic recovery?

This month in EiQ Industrial Magazine, we are making a point about the emergency as regards the industrial system in Italy, France and Germany to summarize the proposals for the recovery of the respective industrial associations.

Foto di Nattanan Kanchanaprat da Pixabay

ITALY

DATA

The scenery is still uncertain and foresees this year a reduction of GDP of 9,6% and an increase of +5,5% in 2021.

According to a recent inquiry (dated June, the 1st) of Confindustria, the main association of Italian manufacturing companies, the industrial production in May decreased of 33,8% as regards the previous year, after the -44,3% detected in April. On average of the last three months, that is when the containment measures for the virus have been taken, the level of the index seasonally adjusted of the production is 34,2% lower than in February.

The end of the lockdown promoted a slow restart even though the domestic and foreign demand is still much reduced. During the spring months, the GDP and the production will still decrease as regards the first quarter.

The fact that in May some positive data have been detected (as regards for example in April, the production increased of 31,4%) must not mislead because “with a low level of activity, a little progress shows a significant increase in percentage”, explains Confindustria.

PROPOSALS

Confindustria in March intervened with these actions aiming to contrast the economic slowdown (see here):

  • Recovery of public investments and of infrastructures, as prime mover of economic grow through an extraordinary plan of three-years with special commissioners and multidisciplinary task force.
  • Ambitious European recovery plan
  • Measures to provide cash to companies through:
    • Enhancement of activities for guarantee fund for PMI
    • Possibilities for firms in difficulty to defer tax payments
    • New credit lines
    • Capital investment in pension funds and debt of PIMI and in infrastructures
  • Start of a new and big program for the simplification of tax system and to improve the energy transaction
  • Incentive to the youth employment with tax relief
  • A plan of actions to attract, stimulate and relaunch the private investments with enhancement of tax incentives

FRANCE

DATA

In France, the MEDEF (Mouvement des entreprises de France), the main association of French entrepreneurs, estimates in a recent study a decrease of 8,2% of GDP for this year and an activity rate in the industry of 40% at the end of May.

Besides the demand suffers a strong shock with a -9% of consumption and a -12% of export. Families will consolidate their savings while their income will decrease.

PROPOSALS

MEDEF proposes some guidelines for the economic recovery with an only purpose: increase confidence in three points.

Here there are the proposals referred to companies and industries (see here the whole document):

  • Rebuilt
    • Support the families’ consumptions to move the money
    • Support the companies economically
    • Enhancing the equity of companies affected by the crisis
    • Improve the attractiveness and the competition
    • Restore the conditions for the circulation of people and goods in Europe
  • Reestablish
    • Mobilize the European funds in strategic sectors such as aviation, transport with low emission, pharmaceutic, agri-food and digital industries
    • Support the innovation of PMI, improving the tax credit for the innovation
    • Support the ecologic and energy transaction of economy
    • Intensify the digital transformation and robotics of companies
    • Complete the revision of the “digital tax” and of the minimum tax rates of companies
    • Promote the sharing of value
    • Amplification the approach CSR
  • Protection
    • Invite all the companies to elaborate their risk mapping to be more resilient to crisis
    • Promote the companies to include in the training the crisis management
    • Support the professional transactions of employees: promote the transaction from a field to the other
    • Reorganize and redirect health on working places with the prevention

GERMANY

DATA

In Germany, the BDI, Federation of German industry, estimated a decrease in production in the manufacturing field of 11,5% in March as regards February: the most remarkable decrease since 1991. As regards the same month of the previous year the decrease is of 14,4%.

Orders in March decreased of 15,6% as regards the previous month.

PROPOSALS

Among different suggestions of BDI the document of “retry and recovery” is particularly important. This document detects 4 phases for the recovery with the relative actions to be implemented.

These are some of the most important proposals:

  • Phase 1 – Containment (2020):
    • Improve cash
    • Reach new international agreements to remove the trade barriers and to avoid introducing new ones
    • Reconsider the efficiency of politics and of appropriateness
  • Phase 2 – Return (2020-2021):
    • Restore the European (and not) value chains
    • Restore the industrial relationships and the processes
    • Coordinate the supportive measures in whole Europe
    • Boost the economy
  • Phase 3 – Stabilisation (2021):
    • Increasing of demand and of family consumptions
    • Coordinate the strategies for recovery in whole Europe
    • Restore and revitalize the European domestic market
  • Phase 4 – Recovery (2021-2022):
    • Develop a long-term growth
    • Promote the incentives for the research and development
    • Influence interest rates
    • To adopt national politics lined up with European actions and activate European funding channels
    • Re-evaluate the climate action 2030

A SINGLE EUROPEAN PLAN

This far the proposals of single countries, but all associations agree that a combined and joint action in whole Europe will make the difference as especially in this moment cooperation and mutual solidarity are fundamental.

From these considerations in May the 3 associations developed a joint statement which is a message for the respective governments to ask an only ambitious plan concerning solidarity, sustainability and digitalization.

The three associations ask:

  • To move on progressively to plans of phasing out from emergency and to fiscal support
  • An international and European coordination and cooperation bringing to a joint answer in all sectors: manufacture, single market, cross-border transports and mobility of work and tourism.
  • An ambitious answer on the financials with the creation of a Recovery Fund too.
  • Strong national and European tax measures
  • Political priorities of budgets, including the ambitions of a Europe, which wants to be greener, more inclusive, autonomous and productive.