EC action plan unveiled

By Sandy Guthrie31 July 2012

EC vice president Antonio Tajani.

EC vice president Antonio Tajani.

The promised European Commission action plan for the construction industry has been unveiled today, with the competitiveness of the construction industry described as "a permanent political priority".

The Commission Communication on strategies for the growth of the European construction industry over the next decade was originally announced at the FIEC (European Construction Industry Federation) annual congress in June.

FIEC said that it warmly welcomed the Commission's Action Plan on the Sustainable Competitiveness of the Construction Sector.

It added that it applauded vice president Antonio Tajani's reiteration, following his speech to the FIEC congress, of the importance of the construction sector for Europe's economy and his decision to hold regular summits with the sector.

FIEC president Thomas Schleicher stressed, however, that announcements need to be backed up with concrete results on the ground.

He said, "Austerity is not leading to renewed growth but is deepening the economic crisis in many countries. We need to see that all-important investment in sustainable buildings and infrastructure in order to secure Europe's future growth and job prospects".

Mr Schleicher added that the construction sector in Europe did not need subsidies, but was the key to recovering Europe's competitive edge and laying the foundations of longer-term economic growth.

He said, "Governments need to see investment in sustainable buildings and vital infrastructure as a contributor to future economic growth and jobs, and not simply as another form of public spending".

FIEC said it was well-known that the built environment accounted for 40% of primary energy demand and over a third of greenhouse gas emissions. It added that there was a huge potential to reduce demand for energy through renovating ageing building stock in order to meet Europe's 20-20-20 objectives. However, to achieve this potential, it said countries would have to ensure that adequate financial and fiscal incentives were in place to drive the market, and also that the skills gap was reduced.

A "further huge challenge" was identified by FIEC to upgrade Europe's transport, energy and broadband infrastructure to meet the needs of future generations.

It said that if governments failed to see the importance of this kind of investment, Europe would fall behind other parts of the world both economically and in terms of social well-being.

"Construction has a vital role to play in this challenge," said FIEC, "provided that the required investment is made available, and while project bonds are a way of leveraging additional private financing for projects, they cannot replace the role of public investment."

Internationally, FIEC welcomed ongoing Commission legislative proposals to ensure that Europe's public procurement markets were protected from unfair competition from international contractors - but it claimed these remained "timid steps".

Mr Schleicher said, "The state aid rules that apply to European companies must equally apply to companies from outside the EU. At present, as we have seen, this is not always the case".

Turning to short-term needs, Mr Schleicher said, "Many construction companies are feeling intense pressure through late payment by public clients compounded by the failure of banks to provide bridging loans to viable enterprises."

He added, "Late payment and the absence of credit are pushing many otherwise healthy companies, in particular SMEs, to the verge of bankruptcy," he added.

Schleicher reiterated that construction, representing almost 10% of EU GDP (gross domestic product), was the key to the health of the economy as a whole.

"In pursuing growth, national policymakers must engage with the construction sector as the Commission has done through this Communication, and see that the sector, given the right financial and regulatory conditions, can deliver the growth, jobs and environmental protection that we so rightly deserve," he said.

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