For EU Internal Market Commissioner Thierry Breton, the lessons from the Corona crisis and the Russian attack on Ukraine are clear: the EU needs new instruments to ensure the supply of important products in crises.

How else is she going to prevent the difficulties in supplying vaccines, face masks, semiconductors or even gas from repeating themselves?

The next step could be the supply of rare earths, which are extremely important for the production of laptops, smartphones, LED lights or electric motors.

China has a de facto monopoly on this and that is anything but reassuring in the current geopolitical situation.

Ultimately, however, the Commission is concerned with all types of goods or services that are lost as a result of geopolitical crises, climate change, natural disasters,

Henrik Kafsack

Business correspondent in Brussels.

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The European Commission no longer wants to rely on European companies being able to take precautions themselves.

In mid-September, she therefore intends to present an “emergency instrument for the single market”.

This should give the EU Commission a whole set of tools to directly control the supply of individual products in immediate crises, but also in critical situations.

The FAZ has a draft of the proposal.

Concrete stock levels of important goods

In extreme cases, the EU Commission wants to oblige the member states to build up concrete stocks of important goods within a certain period of time.

If these "strategic reserves" built up by the member states are not sufficient to cover the needs, the Commission intends to make recommendations to the states on how to distribute the reserves.

In the event of imminent supply bottlenecks, she also wants to be able to specify a reorganization of the supply chains and production lines and the construction of new production facilities.

Above all, however, the Commission wants to intervene directly in the production of important goods or preliminary products in emergency situations.

She wants to be able to tell companies directly which orders they should give priority to.

Companies should only be able to oppose this if it causes them economic difficulties or if they are unable to do so for reasons of capacity.

However, private contracts, i.e. contracts with other companies, should take a back seat.

The Commission admits that this, like the rules for the reorganization or construction of production lines, is a far-reaching encroachment on business freedom.

Therefore, they must also be precisely tailored to the respective crisis and weighed against overriding social interests.

"Vigilance Mode"

A multi-stage procedure precedes the far-reaching rights of the Commission.

In normal times, the Commission should initially “only” analyze where bottlenecks are threatening and set up an early warning system for critical products on the recommendation of a new advisory body also made up of members of the states.

If there is an event that could endanger the security of supply, Brussels can declare a "vigilance mode".

This allows the Commission to request company data and to initially propose the build-up of "strategic reserves" and, if that is not sufficient, to prescribe them.

If the acute crisis mode is declared, the Commission then also has the other far-reaching rights of access, such as interventions in production.

The states can prevent the declaration of vigilance and crisis mode and concrete interventions by the Commission.

However, the hurdle for this is high - as it was when deciding on the taxonomy.

The new rules should not apply to semiconductors because there are comparable specifications for them in the "Chips Act".

It is similar with financial services.

In addition to avoiding supply bottlenecks for important goods, the EU Commission wants to use the proposal to prevent member states from restricting the internal market too severely in crises.

This is primarily a reaction to the experience immediately after the outbreak of the Corona crisis, when countries such as France and, in response, Germany, imposed national export bans on face masks.

At that time, the internal market was also severely affected by national unilateralism and border controls.

Brussels wants to remedy this primarily through transparency and better coordination of national steps.

The proposal has met with criticism in the European Parliament, which has to agree to the emergency instrument and the EU Council of Ministers in order for it to come into force.

"In essence, the emergency instrument implements the principle: together we are the strongest in Europe," says MEP Andreas Schwab (CDU).

Whether “strategic reserves” are the answer in times of globalization is another question.

Ensuring security of supply in the event of a crisis is also a task for companies.