Competitiveness check-up

Council of the EU

What is it?

The "competitiveness check-up" is a health test of important aspects and sectors of the EU economy. It allows competitiveness ministers from EU member states to set out priorities and respond to urgent issues and developments in the real economy

The process is also a response to the call by the the European Council for the Competitiveness Council to regularly evaluate progress on the various elements of a policy for competitiveness, which are set out in its declaration on competitiveness adopted in February 2016.  

Why do we need it?

The competitiveness check-up is a regular working method that allows ministers in charge of competitiveness to analyse horizontal and sectoral economic issues. 

The check-up process also allows ministers to monitor competitiveness mainstreaming. Mainstreaming competitiveness in other relevant policies ensures that the impact on the competitiveness of the European economy is better taken into account when designing and implementing EU rules and developing new policy initiatives. This in turn helps create sustainable economic growth and jobs.

How it works

The check-up process is based on a presentation by the Commission on the latest figures and trends relating to micro-economic issues. Ministers in the Competitiveness Council then discuss, respond and give input on possible implications for EU companies and citizens.

In September 2014, the Competitiveness Council undertook to examine in a more structured and systematic way all relevant proposals that have a substantial impact on competitiveness. 

The working method was announced at the informal ministerial meeting on competitiveness in July 2015 in Luxembourg. The process was launched in October 2015. 

2017

29-30 May 2017

Value chains and services

The Commission presented an analysis of the single market from a value chain perspective. It pointed out that services are becoming more relevant and that the importance of spill-overs from regulatory burdens in services cannot be underestimated.

Many ministers highlighted the links between services and manufacturing. Some remarked that there is a need to increase European SME's participation in global value chains. 

Finally, many welcomed the Commission's intention to monitor the single market from the viewpoint of the evolution and transformation of value chains. 

20 February 2017

Investments in intangible assets 

Ministers exchanged views on intangible investments in EU businesses. Those include for instance:  

  • skills
  • managerial expertise
  • company reputation
  • computer software
  • designs
  • intellectual property

Ministers acknowledged the contribution of intangible investments to the EU's economy and considered possible incentives and policy direction that can be taken to make this sector grow. They took the view that barriers to investment should be removed and a number of policy actions could be implemented to support investment in intangible assets. This should include:

  • adequate intellectual property protection
  • easy access to finance for firms, especially for SMEs, to invest in intangible assets
  • measures in favour of capital venture
  • tax incentives
  • additional efforts to promote investments in human capital
  • prioritisation of education and skill
  • support to investments in research and development

2016

29 September 2016

Access to finance for EU companies and scale-ups

Ministers discussed how to improve access to finance for European companies, with a specific focus on SMEs and scale-ups

They outlined that the source and the availability of financing for SMEs are important factors behind their development capacity, growth and success. Ministers stressed the need to strengthen new ways of financing to support start-ups, innovative SMEs and scale-ups to promote new areas of growth and an innovation-led economy. Measures discussed included venture capital and equity financing. 

In the EU, bank lending is currently by far the most important external financing source for SMEs.

26-27 May 2016

Impact of digitalisation on productivity

Ministers discussed the impact of digitalisation on productivity - with focus on the services sector. 

They offered guidance on how to increase productivity in the EU and bridge the gap with more advanced regions in the world. 

In particular, they mentioned:

  • the need to target investments in promising fields like ICT, research and innovation
  • the quick digitalisation of the services sector 
  • the promotion of digital infrastructures and interconnection of networks 
  • the deepening of the single market 
  • more innovation-friendly legislation 
  • the promotion of training and skills in new technologies 
  • initiatives in support of SMEs and start-ups.

The Council also took note of the progress made on preparations for the establishment of a competitiveness scoreboard. This tool will allow the Commission and EU countries to better monitor developments in the field of competitiveness and to improve the quality of the decision-making process. The scoreboard will include indicators on overall competitiveness as well as on the thematic areas which are most relevant for the competitiveness check-up.

29 February 2016

Support to SMEs to scale up and create jobs

Under the "competitiveness check-up" ministers exchanged views on how to best support SMEs and start-ups in creating jobs and scaling up.

The debate took place on the basis of a presentation by the Commission showing comparative data on start-ups and aspects linked to the scaling-up of start-ups.

Some delegations hailed the fact that, after years of downsizing, European SMEs are expanding and have started hiring again, as showed in the Commission's 2014/2015 annual report for European SMEs. 

The majority of delegations outlined a number of key areas where EU policies can help firms to scale up, including:

  • facilitating access to finance
  • stimulating cross-border activities by further developing the internal market
  • applying better regulation principles in order to design a future-proof regulatory environment.

However, ministers acknowledged that there is a great deal of heterogeneity in SME employment creation across member states and sectors of economic activity.

The SME envoys' network report from last year also confirmed that the SMEs which appear to be spearheading a recovery in SME job creation were primarily those providing services. According to the report, which was presented to the Council on 30 November, in general terms SMEs are emerging from the economic crisis slowly but steadily. 

In 2014, their value-added increased by 3.3% (compared with 1.6% in 2013). Also, the number of SMEs increased to a total of 22.3 million, which is 3.6% more than in 2008.

For the first time in six years, employment in SMEs grew (by 1.2%).

The positive trend in SME performance reflects the improvement in macroeconomic and business conditions. However, emergence from the crisis occurs at different speeds. 

The vast majority of member states saw their SMEs expanding their business in 2014. But in those countries most affected by the crisis the SME revival has not yet set in.

18-19 February 2016

EU leaders call for a close monitoring of competitiveness

At the European Council meeting, EU leaders adopted a declaration on competitiveness, which underlines the importance of competitiveness in generating growth and jobs, and the need to fully exploit the potential of the internal market. It urges EU institutions and EU countries to strive for better regulation and repeal unnecessary European laws to boost competitiveness.   

The declaration reinforces Europe's need to increase its international competitiveness in services and products and in key areas such as energy and the digital single market.

It also calls for a strong, rules-based multilateral trading system and insists on the need to conclude ambitious bilateral trade agreements with non-EU countries and blocs.   

In the declaration EU leaders asked the Competitiveness Council to "regularly evaluate progress on the various elements" that have an impact on the EU competitiveness. This reinforces the role of the competitiveness check-up process.

2015

30 November -1 December 2015

Competitiveness of the EU in the global markets

The Council examined the relationship between internal market integration and the competitiveness of the EU in the global markets, with a special focus on EU market shares in global export markets and the related competitive advantages for the EU.

During the debate, a number of delegations were in favour of making full and timely use of the range of EU trade policy instruments to ensure a global playing field. The difficult situation in some industrial sectors, such as the steel industry, was mentioned in this respect.

The Commission announced that a high-level stakeholders' conference on the energy-intensive industries, including the steel sector, would be organised in the near future to review the current situation and consider appropriate solutions.

The debate took place on the basis of a report prepared by the Luxembourg presidency. The report gives an overview of the work carried out under the Luxembourg presidency and puts forward recommendations as to how competitiveness mainstreaming can be further improved in the future.

1 October 2015

State of the internal market integration

Competitiveness ministers held their first discussions under the newly launched competitiveness check-up process. Their discussions centred on: 

  • the latest economic trends and figures based on a presentation by the Commission focusing on micro-economic issues
  • competitiveness mainstreaming, on the basis of a list of major EU initiatives that have a potential impact on competitiveness

Many participants took the view that it was necessary to help EU companies to increase their level of competitiveness and to expand by making regulatory conditions simple and predictable. This would also contribute to stimulating the level of investments in Europe. 

There was a broad consensus that EU rules should be more efficient and contain a real added-value for consumers and companies.

A large number of delegations drew attention to aspects of trade policy in relation to the competitiveness capacity of European industries and businesses.

Among the main challenges ahead to boost competitiveness, the following were mentioned:

  • the digitalisation of the single market, of the industry and the SMEs
  • the application of smart regulation principles without undermining the level of protection of consumers and workers
  • support to clusters for innovation

The Luxembourg presidency drew up an indicative non-exhaustive list of current and upcoming initiatives that were likely to have a significant impact on competitiveness, including initiatives dealt with by other Council configurations. This provided ministers with an informal overview of key files for competitiveness mainstreaming.

The outcome of the debates allowed the presidency to table a report that was forwarded to the Competitiveness Council held on 30 November.