Industrial Policy Network

1. Stockholm 3. November Industrial Policy Network

2. IN Industrial Policy Network Economic situation and policy

3. IN Industrial Policy Network Euro Crisis – G20 summit

4. IN Industrial Policy Network Euro Crisis – G20Manufacturing Production 1Q11 - 2005=100 – OECD

5. IN Industrial Policy Network Real GDP – G20 CountriesOECD

6. IN Industrial Policy Network G20 summitG20 Current account balances% of world GDP

7. IN Industrial Policy Network G20 summit Contribution to world GDP growthQuarterly %, OECD

8. IN Industrial Policy Network • 100 billion € to Greece - IMF involvement • Haircut for Greek debt: • Banks to accept a 50% debt write off • Eurozone member states will contribute to with up to 30 bill. € • The European Financial Stability Facility (EFSF) enlarged • 440 bill € lending capital • Potential to leverage 1 trillion € for firewall in case of future crisis Euro CrisisSumit results 26 Oct 2011

9. IN Industrial Policy Network • Banks • Member states provide guarantees to the banks to facilitate their access to medium-term funding • Temporary measure – Banks to bring highest quality capital to 9% by June 2012 • Dividends and bonus payments should be constrained until the target of 9% is achieved • Measures to improve the governance of the euro area • Keep the non euro area Member States closely informed Euro CrisisSumit results 26 Oct 2011

10. IN Industrial Policy Network Euro Crisis 31 Oktober 2011

11. IN Industrial Policy Network • “So many people in Greece ask me, is all the pain worthwhile, can we make it? … my answer is, yes we can” • But just to be sure – let’s have a referendum Euro Crisis George Papandreou

12. IN Industrial Policy Network Euro Crisis 2 November 2011

13. IN Industrial Policy Network Euro Crisis Exposure to Greek debt

14. IN Industrial Policy Network DAX 6 months

15. IN Industrial Policy Network „ Anyone who today holds that national advantage is more important than European integration is violating the elementary interests of their own nation “ Euro Crisis Helmut Schmidt • „ We have a crisis of the ability of the political structures in Europe to make decisions“ • „ For the future of Europe this is a much more serious threat than the over-indebtedness of a few euro-countries“

16. IN Industrial Policy Network Current situation in the Nordic countries

17. IN Industrial Policy Network Nordic GDP% y/y, Nordea

18. IN Industrial Policy Network Exchange Rate(Jan 2005=100)

19. IN Industrial Policy Network Business fixed investments% Y/Y, Nordea

20. IN Industrial Policy Network Harmonised unemployment OECD - Nordea Forecast

21. IN Industrial Policy Network House pricesNominal Y/Y – OECD - Forecast Nordea

22. IN Industrial Policy Network Compensation per employee% Y/Y private sector, OECD

23. IN Industrial Policy Network Labour ProductivityDevelopment Y/Y - OECD

24. IN Industrial Policy Network Labour Productivity - index 2010

25. IN Industrial Policy Network Labour Productivity - index 2006

26. IN Industrial Policy Network The Finnish conundrum • New government – new policies? The Danish Zebra • Red policies with blue stripes or blue policies with red stripes? The Swedish Borg • Same old, same old? All for Norway • Same good, same good? Economic policy changes in Nordic countries

27. IN Industrial Policy Network Michael Kumhof and Romain Rancière - IMF A connection between inequality and crisis The result of increases in the bargaining power of high income households: Increases in the income advantage enjoyed by high income households Higher debt leverage among poor and middle income households Vulnerability to financial crisis + = The restoration of poor and middle income households’ bargaining power … [will lead to] a sustained reduction in leverage that should reduce the probability of a further crisis

28. IN Industrial Policy Network Income inequality and household debt

29. IN Industrial Policy Network Financial Transaction Tax

30. IN Industrial Policy Network Introduction by Katrine Søndergård, NFU

31. IN Industrial Policy Network Should not pressure the financing of the real economy Efficiency – no outshoring of financial operations Not so high as to stop normal transactions Behaviour change away from extreme financial products Who gets the dough? Financial transaction taxIssues to discuss

32. IN Industrial Policy Network Europe

33. IN Industrial Policy Network New financial frame 2014-2020 Revision of procedures for public procurement European innovation partnership on health care technologies Establishing of a European patent syste, Revision of the directive for mutual recognition of qualifications Whitebook on secundary pension systems and feee movement Workplan for Danish Presidency I

34. IN Industrial Policy Network Direktive proposal on implementation of the posting directive Proposal on exempting industrial disputes from the rules on services Proposal of changing the working time directive 8 Framework program for research and development Proposal on energy efficiency Codetermination in the Euroepan Private Company Workplan for Danish Presidency II

35. IN Industrial Policy Network Energy road map 2050 - leaked

36. IN Industrial Policy Network • High GHG emissions • The great majority is directly or indirectly linked to energy • Security of supply risks • High dependence on foreign sources of energy imported from a limited number of suppliers including from politically unstable regions • Gradual depletion of fossil fuel resources and rising global competition for energy resources • Variable electrification sources poses new challenges to grid to ensure uninterrupted electricity deliveries • Competitiveness risks related to high energy costs and underinvestment • First mover advantage should be carefully assessed against cost of high carbon, fuel and electricity prices for industry Problems with current system

37. IN Industrial Policy Network Will require trade-offs and the market alone might not be delivering Significant investments will be needed in the near future to replace energy assets Relying on more low-carbon, intra EU and more diversified sources of energy, produced and consumed in an efficient way, can bring significant benefits Solution

38. IN Industrial Policy Network • Energy market prices do not reflect all costs to society • pollution, GHG emissions, resources' depletion, land use, air quality and geopolitical dependency. • Inertia of the physical system • Investments in the energy system are long-term assets leading to significant lock-in • Public perception and mindset of the users • Perception of the risks related to the construction of new power plants and infrastructure by general public can be more negative than expert judgements. Factors that hamper the shift

39. IN Industrial Policy Network • Uncertainty concerning technological, demand, prices and market design developments • Uncertainty about future technologiescan significantly increase investors' risks and costs and makes consumers and businesses reluctant to invest. • Imperfect markets • In some Member States markets are still dominated byincumbents • Market myopia, i.e. the fact that long-term investments are notnecessarily pursued by market actors who are generally drawn towards shorter-term gains. Factors that hamper the shift 2

40. IN Industrial Policy Network • To shape a vision and strategy of how the EU energy system can be decarbonised and become more secure and competitive by 2050. • Specific objectives are being proposed: • Provide more certainty to investors by showing different decarbonisation pathways for 2050 • Show trade-offs among policy objectives as well as among different decarbonisation pathways and identify common elements in all decarbonisation pathways; • Set milestones after 2020 to mobilise stakeholders and give more certainty for period after 2020. Objectives

41. IN Industrial Policy Network Demand side: Energy efficiency Supply side Renewable energy sources Nuclear Carbon Capture These makes six scenarios which have been assessed Four main decarbonisation routes

42. IN Industrial Policy Network Substantial Traíning needed Need for higher skilled jobs Increased cost for households But what about employment?? Social effect

43. IN Industrial Policy Network There is a need for an integrated approach. Electricity makes major inroads in decarbonisation scenarios reaching 36-39% share in 2050 The share of renewables at least 55 Modern, reliable and smart infrastructure including electrical storage. Nuclear has a significant role in decarbonisation in Member States where it is accepted CCS contributes significantly towards Substantial changes in the period up to 2030 will be crucial for a cost-efficient long term transition. Households shouldering the greatest cost increase coming from higher costs for direct energy efficiency expenditures Common elements to scenario analysis

44. IN Industrial Policy Network Global climate action is a prerequisite for successful decarbonisation Predictability and stability of policy and regulatory framework creates a favourable environment Discussions about policies for 2020-2030 should start now Energy efficiency tends to show better results in a model world than in reality. Strong need for targeted support policies and public funding supporting more energy efficient consumer choices. Due attention should be given to public acceptance of all low carbon technologies and infrastructure Implications for future policy making

45. IN Industrial Policy Network Flanking social policies might need to be considered early in the process given that households shoulder large parts of the costs. Strong support should be given to R&D in order to bring down costs of low-carbon technologies. Flexibility. The future is uncertain and nobody can predict it. That is why preserving flexibility is important for a cost efficient approach External dimension, in particular relations with energy suppliers, should be dealt with pro-actively Implications for future policy making 2

46. IN Industrial Policy Network Presentation by Mika Contacts from employer side to EMCEF EP Environmental committee Draft report by SaluHassi 22 November Final proposed report 29 November Vote in environmental committee 24 January Sulphur directive

47. IN Industrial Policy Network EU2020

48. IN Industrial Policy Network EU2020 Targets

49. IN Industrial Policy Network • 1. Digital agenda for Europe • by 2013: broadband access for all • by 2020: access for all to much higher internet speeds (30 Mbps or above) • by 2020: 50% or more of European households with internet connections above 100 Mbps. • 2. Innovation Union • refocusing R&D and innovation policy on major challenges for our society like climate change, energy and resource efficiency, health and demographic change • strengthening every link in the innovation chain, from 'blue sky' research to commercialisation EU2020 Flagship initiativesSmart Growth

50. IN Industrial Policy Network • 3. Youth on the move • helping students and trainees study abroad • equipping young people better for the job market • enhancing the performance/international attractiveness of Europe's universities • improving all levels of education and training (academic excellence, equal opportunities) EU2020 Flagship initiativesSmart Growth