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EU Seeks Sweeping New Crisis Powers to Secure Critical Supply Chains

The executive body of the EU (EU) organized a fresh emergency tool to secure supply chains in times of crisis that could give it sweeping new powers to block member countries from adopting restrictions to the free movement of crisis-relevant goods or force businesses to break contracts and stockpile key products.

Information on the plancalled the Single Market Emergency Instrument (SMEI)were unveiled on Sept. 19 by the European Commission (EC), which may be granted the energy to declare a crisis and trigger a variety of market interventions.

The draft measure will come in reaction to what the EC said were structural shortcomings in the manner the EU single market operates which were exposed by the COVID-19 pandemic and that hampered the EUs capability to respond effectively to crises.

We are in need of new tools that allow us to react fast and collectively, saidMargrethe Vestager, the ECs executive vice president , in a statement.

The COVID-19 crisis managed to get clear: we should make our Single Market operational all the time, including in times of crisis. We should ensure it is stronger, she said.

While giving an answer to questions concerning if the new measures represent a well planned economy, Vestager insisted its the opposite, since they ensure a functioning market.

WE SHOULD Be Better Prepared

The brand new crisis management tool establishes a fresh mechanism to monitor the EU single market, identify different risk levels, and coordinate a reply in three modes: contingency, vigilance, and emergency.

In contingency mode, the EC and EU member states set up a communication and coordination framework to improve preparedness.

Whenever a threat has been identified, the EC can trigger vigilance mode, which may concentrate on monitoring supply chains of critical goods and concentrate on accumulating strategic reserves of such products.

In the event of a full-blown crisis, the EC would initiate emergency mode, which may see such measures as a blacklist of prohibited restrictions to make sure free movement of critical supplies within the EU single market.

In the emergency stage, EC may possibly also advise that member countries distribute the strategic reserves in a targeted manner and demand that businesses accept priority rated orders for key supplies. Businesses will be forced to adhere to such demands or explain the grave reasons justifying refusal, the EC said.

Theres also an avenue for accelerated placing of critical goods on the EU single market through a streamlined procedure for testing and accreditation.

We should be better ready to anticipate and react to another crisis, Thierry Breton, EU commissioner for the inner market, said in a statement.

Instead of counting on ad-hoc improvised actions, the Single Market Emergency Instrument provides a structural response to preserve the free movement of goods, people, and services in adverse times, he added.

The proposed new instrument still must be debated by EU member states and put to the European Parliament for a vote, so almost a year will probably pass before it becomes law.

Tom Ozimek

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Tom Ozimek includes a broad background in journalism, deposit insurance, marketing and communications, and adult education. The very best writing advice he’s have you ever heard is from Roy Peter Clark: ‘Hit your target’ and ‘leave the very best for last.’

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