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A bit of history: European governments have been obsessed with and have managed the steel industry since the early 20th century. The earliest predecessor of the European Union was the European Coal and Steel Community (ECSC) created by the Treaty of Paris in 1951.
Caveat: I am not an expert of the steel industry nor the steel policy pursued by the EU and its predecessors
Today (5/22/2019), we learn that the second largest steelmaker of the UK, i.e. British Steel, went bust and will be put under government administration. Of course, this steelmaker was in trouble for years. However, as was pointed out (emphasis added): “The final trigger for British Steel’s collapse into administration, however, was not low steel prices but arguably a demand from the EU for £120 million worth of payments under its Emissions Trading Scheme (ETS) – which is supposed to provide an incentive for heavy polluters to cut their carbon emissions.” (Source 1)
The other, very recent news was that the merger of ThyssenKrupp steel manufacturing and Tata failed. Again, reports suggest that the EU is to be blamed as well. “[T]he tie-up has been subject to an in-depth European Commission (EC) competition investigation.” (Source 2)
What about energy prices for businesses in the EU? Do EU consumers subsidize lower business energy prices by paying higher consumer prices? Or have the EU and member countries (particularly Germany) driven up energy prices for business by pursuing outrageous Climate Change policies? I am afraid, the latter is the case! Few examples: Why is fracking not more developed in the EU? Why are nuclear power plants not more developed or even shut off?
So while in the past the EU and its predecessors emphasized the strategic importance of steel production in the EU and tried to manage the steel industry, in more times, preoccupied with environmental and antitrust zealotry, the EU is killing heavy industries like steel. In a global market of steel with cut throat competition, the EU Commission is doing obviously the wrong thing!
Always a huge mistake, when politicians try to manage businesses!
Sources:
- Thyssenkrupp expects EU to block Tata steel merger (dated 5/10/19)
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