Tuesday, October 27, 2015

"New Trends in the EU Industrial Policy - Implications for Bulgaria”

On October 16, the European Union Center at the University of Illinois at Urbana-Champaign was one of the sponsors for a lecture presented by Visiting Scholar Paskal Zhelev.  Carlo Di Giulio was one of the attendees of the lecture, and he wrote this piece about the event.  
As a sponsor and co-sponsor, the European Union Center brings different lecturers and presentations to campus throughout the academic year.  For more information on future events, please visit our calendar.  

It was a nice and informal atmosphere on Friday the 16th at Lucy Ellis Lounge where Paskal Zhelev had explained the implications of the EU Industrial Policy from a historical and international perspective. At the end of the lecture, a participative public stretched the schedule by more than 20 minutes asking questions and debating on the topic, as Prof. Zhelev was glad to answer and keep the debate lively and interesting.

After a period of abandonment of structured Industrial Policies and towards the end of the recent Economic crisis, the EU has taken a U-turn on IP relying more on the self-regulatory power of markets as suggested by the Neo-liberal approach. The need to relaunch a weakened manufacturing sector, important challenges brought by globalization, and the observation of successful Industrial Policies in the Eastern Asian region have led to conspicuous investments on IP and the adoption of broad reforms, such as the Europe 2020 strategy. However, the case of Bulgaria shows how the poorest member states are facing policy hurdles that can hardly be removed without direct actions by the EU institutions in modifying the terms for accessing monetary funds. Bulgaria was indeed forced to adopt a horizontal IP after its accession to the EU, but only after a period of liberalization and deindustrialization. As a consequence, a lowering in the industrial capabilities of the country has not been fulfilled by a favorable IP, which has instead provided support to unprofitable activities. Although part of the responsibilities should probably be addressed to Bulgaria itself, as it was not able to maximize the opportunities offered with the EU accession, one of the main issues still resides on the design of EU policies, too often made for high competitive countries.

 At the end of the lecture, while the EU strategy can be considered still beneficial, doubts are casted on a few details, especially in terms of equality among member states. Light has been shed on the Bulgarian approach and more consciousness of its limits and past mistakes could be a lesson for the future.

Carlo Di Giulio is a graduate assistant at the European Union Center at the University of Illinois at Urbana-Champaign


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