Referee, not schoolmaster


The Covestro CEO welcomes the EU Commission's initiative for a new net-zero industrial law. He takes Commission President von der Leyen's current proposal as an impetus to reflect on industrial policy.

Mammoth conferences of politics and business often have a hard time. Many lofty plans, few concrete results – that is usually the criticism. The recent species protection summit in Montreal showed that things can be different: Large areas of land and sea are soon to be placed under protection. And the World Economic Forum, which has often been pronounced dead, also caused a stir when Ursula von der Leyen appeared before the microphones in Davos two months ago. The EU Commission President announced that she would make Europe the engine for green industries. And has now followed up gratifyingly quickly with a proposal for a net-zero industrial law.

This is absolutely right and necessary. Because climate neutrality and, beyond that, sustainability in all its dimensions are increasingly proving to be the major project of mankind in the 21st century. Ecologically: we must save the earth's life-support system from collapse. Social: We must enable more social justice and participation. Economically: We must break new ground for growth, prosperity and well-being. So it's only logical for Europe to breathe life into its Green Deal ambitions – to at least keep up with other eco-drivers like the U.S. and China.

Strong industry, capable state

But the Commission's initiative also highlights two key issues. First, we need a strong industry overall to meet the enormous challenges of our fast-moving, increasingly fragile world. An industry that is at the forefront of implementing the transformation agenda for a green, smart future: Energy transition, new mobility, digital revolution.... An industry that has the right environment to research, develop and invest in the best possible way. This also and especially applies to chemistry, which as the "mother of all industries" underlies so many other key sectors.

From this derives – secondly: We also need a state that sets and ensures these framework conditions. There is currently a lot of talk about an active industrial policy. However, we hear very little about what this means. As I see it, we need the state as a referee who determines the rules of the game – but not the moves. The task is to support the industry through a consistent regulatory policy that is liberal in the classical sense for a fair, socially responsible competition.

We need a capable state that ensures a free-market environment with a level playing field. It sets guard rails that also serve the common good: generationally fair, environmentally preserving. And which, within this framework, enables the economy to act on its own responsibility. But a capable state also has the courage to adjust the rules of the game when the situation requires it. To change course when unforeseeable crises arise.

Consistent, reliable, agile

For me, proactive industrial policy is therefore threefold: consistent, reliable and agile. It should uphold principles such as technological neutrality or the polluter-pays principle. It must not give unjustified preferential treatment to anyone, either internally or in foreign trade, and must not serve particular interests. And, above all, it must only set the goals, set incentives and milestones. It must be left up to the companies to shape them. In other words: referee, not schoolmaster. 

In the past, however, the referee has often failed to live up to his role. The result, for example, has been ailing infrastructures in many places and painful deficits in education and health care. What's more, the global competitiveness of Europe as a business location is threatened by energy prices that are structurally far too high and by excessive bureaucracy and regulation. Here, too, we need a consistent industrial policy. And we must return to the rule-based multilateral economic system that is being undermined by geopolitical conflicts and national egoisms. If not, von der Leyen's green industrial plan will remain patchwork.

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