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European integration is proceeding presently along certain “federal lines”: i.e. new division of competence between the EU institutions and the member states has been fixed in the EU basic law (in effect for already a couple of decades) is slowly but decisively entering the states’ socio-economic sectors. These “federal lines” have to be in the governance’s mind while adjusting national political economies’ changing priorities to streamline active measures in recovery and resilience along the EU-wide integration ideas.
The EU Treaties have already specified the “division of competences” between the EU institutions and the member states: during last decade these “division” arrangements paved the way to a “federalization” in the EU-states’ relationships. The latter are based on three guidelines: a) exclusive EU competence, where only EU can legislate (e.g. in competition rules, customs union, common commercial policy, etc.); b) shared competence with about a dozen spheres including energy and transport, environment and agriculture, etc.; and c) supporting or supplementing competence, which left to the states’ governance the whole responsibilities in some spheres of national growth as education and industry, culture and tourism, etc.
The post-pandemic effect on socio-economic development in the states has forced the EU to take additional measures for recovery and resilience programs in the states, the process that accelerated the national governance in re-directing existing priorities and adopt new actions towards recovery. The EU institutions also activated their influence on the national recovery and resilience plans to make them more adaptable to contemporary challenges.
In this article a few issues are analyzed concerning the EU’s “supporting” competence: i.e. in industrial development, assistance in cohesion, as well as in education policies that attracted recently additional EU attention. These “assistance” measures shall only instigate the national governance to prioritize most vital for the Baltic States’ policies towards citizens’ wellbeing.
Industry and manufacturing
New realities in the world and in Europe can affect the Baltic States, such as deficit of vital resources, adequate skills, energy sector’s dependence on imported fossil fuels and other problems of a geopolitical nature.
Two points shall be underlines: first, most EU states are feeling dependences on some resources and raw materials critical for the states’ industrial transition, such as lithium or synthetic graphite, which are so important for the production of electric batteries. And so is with the wood products and timber: i.e. the prices have risen by more than 25 percent in one year, the largest increase among all construction products.
Secondly, over the last two decades, scientific research world-wide increased human ability to master biology together with advances in other spheres, e.g. in digitalisation, automation, AI and data-analysis in production processes. It all provided for a revolutionary transformation in practical aspects of bio-manufacturing enabling significant cost reductions in operations, which in turn have enabled a huge progress and maturation of the overall biological engineering and management.
One of the modern trends in global/European corporate development, as well as in national growth, in general is bio-manufacturing. For the Baltic States in which there are no major competitive industrial sectors, it could be a “silver bullet” providing a window of opportunities for start-ups; besides, the EU funds are going to support that direction.
The perception of biology has shifted from a field of natural science to a consumer-technology progress (e.g. including fundamental “DNA-programming” and genetic code’s manipulation, in which the cost of “programming” has been declining by 50 percent each year) allowing companies to use the bio-technology for customers’ benefit.
These bio-technologies have driven further on the evolution of “general genetic engineering” towards relatively new spheres of synthetic biology, which helps to design and “form” new biological parts, processes and systems for specific customers’ purposes, so-called bio-tech. Innovations in synthetic biology has attracted investors’ attention: thus in 2020, global venture-capital invested into biotech a record $36.6 billion, while biotech IPOs raised more than twice the amount of capital compared to 2019.
Biotech is moving fast beyond its major present direction in healthcare; it is predicted that more than half of the new biotech applications in the next decade or two would occur in such sectors as agriculture and food, consumer products and services, new materials and energy. Source: https://www.weforum.org/agenda/2021/12/how-to-fuel-the-biomanufacturing-revolution/
Thus, bio-manufacturing as a new trend in innovation has opened perspective ways to sustainable and innovative bio-solutions across numerous future value chains, enabling SMEs and big companies actively participate in production and distribution. Thus, according to a recent Mckinsey’s research, the economic benefits could be worth up to $4 trillion per year over the next two decades. Beyond its intrinsic economic, performance and environmental advantages, bio-manufacturing is also one of the most promising areas of developing technology when it comes to solving major European critical instances, e.g. micro-plastic pollution, pandemic’s prevention and preparedness to future crisis.
It is anticipated that bio-manufacturing will unlock major advances in areas such as:
1. Bio-remediation: developed microbes and enzymes can metabolize wastewater contaminants and transform them into useful bio-products.
2. Bio-security: localized bio-manufacturing capabilities in various states are able to support rapid and effective responses both to post-pandemic growth and to stable exports.
3. Bio-innovation: development of existing and new ingredients and materials are enhancing value chains while offering alternatives to petro-chemical energy sources.
Although several efforts in numerous states have been directed towards above solutions, there are still obstacles to fully realized potentials of the bio-manufacturing revolution: e.g. presently, there is a need to accelerate the feedback between biological design and product application to ensure commercial success. In order to power the diversity of applications emerging from this field over the next 20 years, significant effort is needed to grow and develop the future bio-workforce.
EU in cohesion: contributing to green and digital transition
Contemporary challenges have changed dramatically the EU’s cohesion policy, the most important instrument in assisting the Baltic States. Modern vision of sovereign, resilient and autonomous European states is based on the following premises which are having direct consequences for the Baltics:
= the member states have to invest in cutting-edge products and technologies that would make them competitive in Europe and the world, while generating “quality jobs”;
= the states must be leaders in the “markets of the future”, and not being reduced to a role of subcontractor for other producers;
= a concept “European factory” shall be an integral part of European and states’ governance; it will include sufficient means to cater for own needs and also conquer world markets with increased exports;
= EU as a whole and the member states shall not hide in the shell and produce everything themselves; the EU-27 has to navigate from evident dependence of supplies affected by the hazards of the “geopolitics of value chains”.
Reference to: Commissioner Breton comments at the conference “A stronger industry for a more autonomous Europe” (13 January 2022), in: https://ec.europa.eu/commission/presscorner/detail/en/speech_22_354
Among the EU’s effort to combat post-pandemic negative effects and extend the EU response to the states’ recovery and resilience plans is the REACT-EU program (in short for Recovery Assistance for Cohesion and the Territories of EU), which works through two “coronavirus response investment initiatives”, which actually contribute to green, digital and resilient recovery of the national economies. The REACT-EU package includes €55 billion of additional funds that have been available during 2014-2020 European Regional Development Fund (ERDF) and the European Social Fund (ESF) as well as the European Fund for Aid to the Most Deprived (FEAD). Additional funds are provided in 2021-22 from Next Generation EU and through a targeted revision in the current multi-annual EU financial framework. The additional support will also serve to invest in the European “green deal” and digital transition, in addition to other significant investment in the areas of EU cohesion policy.
More in: https://ec.europa.eu/info/strategy/eu-budget/long-term-eu-budget/2021-2027/negotiations_en
To ensure sufficient support to the states and regions most in need, the Commission’s revised proposals also provide for a review of national cohesion allocations in 2024, taking into account the latest available statistics; this review will lead only to upward adjustments of up to €10 billion for all EU states. Source: https://ec.europa.eu/commission/presscorner/detail/en/QANDA_20_948
EU support in education
The Commission has adopted in mid-January 2022 a recommendation on a new concept in member states’ education policies, i.e. learning for environmental stability. The proposal’s aim is to support schools, higher education institutions, non-governmental organisations and all education providers in the member states with understanding and skills on sustainability, climate change and the environment.
See the proposal in: https://education.ec.europa.eu/document/proposal-for-a-council-recommendation-on-learning-for-environmental-sustainability.
A new European “competence framework” on sustainability is part of the EU Joint Research Centre, JRS which assists the states in building competences needed for the green and digital transition, as well as in critical and initiative-taking thinking, in understanding the impact of everyday actions society, environment and the global climate.
Source: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_327
Although education is a member states’ competence, there is usually a European Commissioner for these issues in all Commission’s Colleges; thus, presently, Commissioner for innovation, research, culture, education and youth underlined that helping children, young people and adults to learn about climate issues, biodiversity and sustainability presented an important task for states’ governance. However, the EU’s role is to work closely with the states in placing sustainability at the center of national education and training systems; so that all learners (from an early age to elderly) have to understand governments’ actions for circular and digital economy, environmental sustainability and recovery. The Commission proposed for the states the following measures:
• Providing learners of all ages an adequate access to high-quality education and training on climate change, biodiversity and sustainability;
• Establishing learning for environmental sustainability as a priority area in education and training policies and programs in order to support its contribute to the green transition;
• Encouraging and supporting approaches to sustainability in all educational and teaching facilities in order to develop visions for planning and governance through active students and staff’s involvement in managing existing resources in partnerships with local communities;
• Mobilizing national and EU funds for investment in sustainable and green infrastructure, training, tools and resources to increase education and training participation in green transition.
On framework in: https://publications.jrc.ec.europa.eu/repository/handle/JRC128040.
On JRS in: https://ec.europa.eu/jrc/en/news/jrc-publishes-new-competence-framework-support-learning-environmental-sustainability
Public-wide learning for environmental sustainability shall provide citizens with competences needed to embrace sustainability in their daily lives as consumers, producers, policy-makers, employees, etc. Sustain¬ability competences can help learners to form a knowledge basis and adequate skills to become active in national recovery and resilient processes.