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We live in a time of changes. Therefore, it is very difficult to predict how our lives will evolve – both from the perspective of companies and from the perspective of humanity in general. In the last 10 years, there have been many rapid change processes in the industry such as technological transformation and digitalization. Covid-19 has once again massively accelerated this whole process. For Germany and Lithuania this means a great opportunity in cooperation.

Difficulties forced us to change

During the pandemic, many companies understood how big the impact of digitalization really is. People suddenly saw that there were opportunities lying fallow here. The lockdown and other restrictions forced companies to change how they sell, organize their sales and work. Everyone started investing in technology and innovation. For the first time, industrial companies understood that physical points of contact were not as important.

Due to the coronavirus, German exports fell by 9% in 2020 – the biggest drop since the 2009 financial crisis. When the pandemic started, German exports were halted because borders were temporarily closed, all logistical systems were largely out of balance, and supply chains broke down. However, this was only temporary and the entire market is realigning itself.

Industry 4.0 standard will help us get back on track

Germany has always been a good example for the Lithuanian Confederation of Industry – especially when we started building our Industrie 4.0 platform. Germany has been successful in implementing Industrie 4.0 at all levels: starting with industrial companies and ending with the public sector.

Germany has very big plans in the education sector for digitalization, which can be a great example for other countries, including Lithuania. Lithuania has one of the fastest internet speeds in the world. We are one of the leading countries in upload speeds, ahead of countries like Japan or Sweden. We have free public internet in most public spaces in Vilnius, so we can surf the internet everywhere. Lithuania is a very digital country.

I am glad that we have close cooperation with countries in the EU. For example, we cooperate with Germany in ‘BusinessEurope’, which connects business organizations from 34 European countries. Our goal is to reduce regulation due to which subsidies we receive from third countries are not controlled, although subsidies from EU countries are controlled very aggressively. In the EU, we need tools to control subsidies that come from countries that are not part of the EU and that distort the EU market.

Lithuania keeps a close eye on Germany

Lithuania is keeping a close eye on how Germany is implementing green policies. The country will spend about 40% of its stimulus package (about 11.5 billion euros) on green industry. Another part of the fund, amounting to about 14 billion euros, will be allocated to the digitalization of the economy. Meanwhile, Lithuania will spend only 37% of its funds on green transformation, which is a bare minimum requirement of the EU.

This July, the European Commission plans to announce an offer on the EU Carbon Boundary Adjustment Mechanism (CBAM). We are sure that this instrument is a must if we want to have good competition between companies in EU countries. However, we think that we do not pay enough attention to the EU hydrogen strategy, which aims to integrate recyclable hydrogen. The development of hydrogen technologies would help Lithuania to reduce its energy dependence on fossil fuels.

Therefore, we ask Germany to initiate changes to the plan, to the 20 million euros we have allocated now, another 70 million would be allocated. It is clear that hydrogen will be an important energy carrier, and countries that have no doubts about its future are already providing significant funding. Here we see Germany as a leader, having already allocated 10 billion euros for the development of this field.

A look to the future

Europe and France are actively considering proposals to strengthen the industrial base and competitiveness of the EU and its member states. The EU needs an ambitious European industrial policy, and its manufacturers, suppliers and other parties in the supply chain need measures to strengthen the EU economy. No one but the Europeans themselves have an interest in a strong and united Europe, because then it will become a strong competitive force.

We are happy with the European Commission’s decision to renew the Industrial Strategy. This move by the EC is based on the need for industry’s ambitions to be fully in line with the new realities of the post-COVID-19 era and to foster the transition to a more sustainable, digitalized, resilient and globally competitive economy.

Developments in global markets in recent years show that the European Union needs an ambitious industrial strategy to compete with other regions of the world such as China, the United States and India, which have made their industries a priority on the political agenda. Thought needs to be given to how to strengthen the competitiveness of European industry and how to protect the EU’s strategic infrastructure and technologies, which often give EU industry a competitive edge.

Vidmantas Janulevičius
President of the Lithuanian Confederation of Industrialists

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