Because the EU is wrong to cripple development contracts for large companies

Because the EU is wrong to cripple development contracts for large companies

Facts, numbers and scenarios on the program and development contracts that the EU wants to reformulate. The analysis of prof. Pyrrhus

While Poland and Hungary (with Slovenia) try to stop the Community budget and the Recovery Fund, asking that the obtaining of their resources be disconnected within their national borders from the respect of the rules of a rule of law – as the other countries have rightly established of the EU – there is a lot of discussion among insiders whether large European companies will also be able to enjoy the facilities they have benefited from up to now in the new 2021-2027 funding cycle and which, in many countries like ours, have allowed them to promote in the last twenty years, massive new investments especially in less developed regions. In this regard, the concern is palpable among the top managers of large groups because a precise orientation of the Commission and of a part of the European Parliament would instead like to reserve only to SMEs the facilities which up to now also the largest companies were allowed.

In the meantime, it should be noted that for the EU, for the purposes of benefiting from the incentives, those with 250 ula-work units per year or more, or with a budget total of 43 million euros, are considered large companies. Now it is certainly appropriate to want to strengthen the SMEs which in almost all the States of the Union represent by far the majority of their corporate universes, but it is equally true that the big players, making investments far superior in size and characteristics to those of small and medium-sized companies, are in reality the entrepreneurial subjects thanks to which the European Community can successfully compete with the United States and China; therefore, it should be in the common interest of the economies of the European Union to further strengthen their major competitors, also encouraging their aggregations and mergers. The birth of Stellantis in January 2021, which will result from the union of the PSA and FCA automotive groups, represents a striking example in the direction just hoped for.

There are about 3,400 large companies in Italy and, while representing only 0.1% of its companies, they employ 20.7% of their employees, generate 31.7% of added value and make 41.3% of investments. , driving in strategic sectors – steel, automotive, aerospace, chemicals, energy, agri-food, ICT, navalmeccanica, tac – branched supply chains. (source: Italian Statistical Yearbook 2019-Istat).

This driving function is even more felt in southern Italy, where – just to mention a few mega-factories – are located the steel plant in Taranto (8,200 direct employees), the FCA in S.Nicola di Melfi (7,247 employees), the Sevel in Val di Sangro (6,500), all supported by induced activity chains; component manufacturing plants with high occupancy rates headed by TD-Bosch, Marelli, Magna, Skf, Bridgestone, Denso Manufacturing, Adler, in various regions; the major national refineries in Priolo, Augusta, Milazzo and Sarroch; vast aeronautical factories of Leonardo and Avio in the Neapolitan area, in Foggia, Grottaglie and Brindisi; powerful power plants of Enel, Edison, Sorgenia, Enipower, Erg in various provinces; Versalis petrochemical plants in Brindisi and Priolo; shipbuilding by Fincantieri in Castellammare di Stabia and Palermo with the imposing Arsenal of the Navy in Taranto; the factory in Catania of absolute national importance in the ICT of STMicroelectronics with 4,200 people; advanced pharmaceutical plants among others of players such as Novartis, Pfizer, Sanofi, Merck, Dompé; paper factories of the State Polygraphic Institute in Foggia, of the Seda Group in the Neapolitan area and of Fater in Pescara; large factories of railway equipment and signaling in Naples, Caserta and Reggio Calabria; the largest onshore oil wells in Europe in Val d'Agri and in the Sauro valley in Basilicata where they extract Eni, Shell, Total, Mitsui; cement plants of Buzzi Unicem, Italcementi, Colacem; multinational glassworks such as Pilkington and Owens Illinois; dozens of sites of some of the major Italian and foreign agri-food industries such as Ferrero, Barilla, Granarolo, Parmalat, Coca Cola, Birra Peroni, Unilever, Heineken, Casillo, De Cecco, Divella, Princes Mitsubishi, Valfrutta, Orogel, Giv, La Doria.

These industries have increased employment, or at least are retaining it even in times of pandemic, solidly fuel the connected supply chains, attract new investments also from abroad, develop skills consistent with the local job offer. According to Mise data, in the period 2013-2018 68% of the total concessions were reserved for SMEs and 32% for large companies. Furthermore, of the 3.8 billion in incentives granted to SMEs, 2.3 billion were granted by central administrations and 1.5 billion by regional ones. In the same period, large companies also benefited from 1.6 billion in subsidies from central administrations and 260 million from regional ones.

The Puglia Region with its incentive system for large companies focused on program contracts, between 2014 and 2020 financed 62 with 458 million, which started investments for 1.2 billion, of which 491 million for activities research and development, with a total employment of 15,614 units, of which 1,322 new employees. Over the years, Invitalia has also admitted to development contracts – in some cases co-financed by Regions such as Campania for those located in its territory – several dozen large industrial companies, the majority of which are based in the South.

Therefore, even in the new cycle of investments with EU funds for the period 2021-2027, large companies should continue to be allowed – in the South and in the other underdeveloped areas of the EU – to benefit from incentives to acquire tangible assets, or at least to promote research and innovation. , energy efficiency and renewable energy generation.

Our country and its southern areas must defend and enhance the technological and professional heritage of large companies, increasingly favoring synergies with SMEs in exclusive market logic.

Federico Pirro – Professor of History of Industry, University of Bari

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Sat, 21 Nov 2020 06:31:45 +0000.