EU evaluates new powers to maintain inputs during crisis

The European Union is weighing a broad set of new powers, including possible export controls, that would give it the ability to protect the supply chain of the bloc during periods of crisis.

The European Commission, the EU’s executive arm, will unveil the proposal in the spring, according to an EU official familiar with the plan.

The new rules will be part of the so-called Single Market Emergency Instrument, a proposal designed to address some of the challenges the EU experienced during the pandemic of COVID-19, when countries struggled to secure vaccines and protective equipment.

The Commission will propose new measures to quantify, anticipate and counter any single market disruption, including in industrial supply chains, said the official, who asked not to be named because the plans are private.

Johannes Bahrke, a spokesman for the Commission, declined to comment on the details of the proposal. He added that the pandemic “has shown that some of the current rules and tools for the single market are not sufficiently adapted to crises and emergencies” and that the new proposal would help ensure “greater transparency and coordination when a critical situation arises.”

Export controls

“We need structural solutions for the next crisis which, whatever its nature, can trigger major shocks in demand or supply that affect our industries and may fragment our single market,” wrote the head of EU internal markets, Thierry. Breton, in a Dec. 22 letter to his staff to which Bloomberg had access.

One of the ideas under discussion would be for the Commission to monitor supplies to third countries in times of difficulty, replicating the vaccine export control system. Under that program, which expires at the end of the month, companies need to obtain EU and national authorization before shipping doses of COVID-19 vaccines out of the block.

The proposal would also allow the EU to request information from companies about their industrial production capacity, inventories and delivery times and, in some cases, facilitate the joint procurement of critical goods, according to the official.

The rules may also include a more important role for the Commission in reviewing national restrictions on the flow of goods in the single market, to avoid unilateral measures by member states as seen in the early days of the pandemic.

EU leaders are expected to hold a first discussion on the Single Market Emergency Instrument during a summit in Paris to be held March 10-11 and the official proposal is likely to come later, the official said.