Many important decisions on Europe’s enterprise and industry policies are taken by Günter Verheugen, the Vice-President of the European Commission.A German Social Democrat, he has served as a top EU official since 1999, first as Enlargement Commissioner under Romano Prodi. Under Jose Manuel Barroso he was put in charge of enterprise and industry. He spoke to EuroNews about Europe’s growth problems, competitiveness, support for small and medium-sized enterprises, and the planned European legislation on chemicals. EuroNews: Mr.Verheugen, environmentalists accuse you of watering down the plannedbill on the Registration, Evaluation and Authorisation of Chemicals, known as REACH. Meanwhile industry lobbies are also attacking you, saying the “bad boys in Brussels” are going to lumber chemical companies with high costs. Verheugen: There is no perfect solution that will please everyone. The fact that we’re being criticised by both sides shows that we have found a fair compromise. That’s my conviction. If you look at the legislation, you’ll see that the European Parliament did seek a package that balances environmental and health concerns with economic and financial interests. EuroNews: Mr.Verheugen, when you were appointed Enterprise and Industry Commissioneryou made a courageous promise to fight bureaucracy. Have you achieved this? Verheugen: From now on there will be special checks to make sure that each European bill takes into account the economic consequences and administrative burden for the member states and for the companies involved. Moreover, we will check – sector by sector – all the existing European legislation and we will decide on a case-by-case basis whether a particular bill can be simplified, whether it’s really needed at all or whether it could do with some adjustments. EuroNews: Can you give us a concrete example? Verheugen: Well, my favourite is a bill dating back to 1968 on “how to handle wood.“It sets out how to calculate knotholes. That’s going a bit too far if you ask me. EuroNews: You portray yourself as a supporter of small and medium-sized enterprises. What can you actually do for them? Verheugen: We here in Brussels can do some important things to make life easier for SME’s. We can enhance their capacity for innovation. We can improve their access to risk capital. We can work to simplify the administrative and tax framework. We can make it less complicated for SME’s to take part in European tenders – and a lot more. EuroNews: In recent weeks and months you received a bunch of letters from the 25 EU capitals, presenting their national action plans to promote the Lisbon Strategy for growth and employment. This strategy was approved five years ago and today’s it’s still a paper tiger. How can you bring it to life? Verheugen: The economic integration of Europe creates a huge potential for growth which should be fully exploited. Moreover, Europe should become more attractive for investors – for instance through clearer EU legislation. More and better jobs should be created – through policies focussing on education, qualifications, research and development. That is where Europe’s future lies. EuroNews: Why is economic growth strong in India, China, and the United States while Europe is lagging far behind ? Verheugen: There are major economic disparities within Europe. Some countries are doing very well. The overarching problems are essentially linked to the slow growth of three big economies – Germany, France and Italy. It seems to me that these countries should make a really big effort to get back onto the path of sustainable growth. I think they will get there, if the necessary reforms are implemented at thenational level – and if they reach the objectives agreed on in the Europeangrowth and employment strategy. EuroNews: The European textile industry is in crisis, the shoe industry is in crisis – the list goes on. Don’t you feel a bit like the captain of the Titanic ? Isn’t Europe’s industry drowning in the merciless sea of globalisation ? Verheugen: No, on the contrary. We have re-discovered industrial policy. It used to be considered a dirty word in some quarters, and some people were convinced we had moved into a post-industrial era. That’s nonsense, and it’s dangerous nonsense.Europe cannot survive without a strong industrial sector. And it is flourishing – in every EU member state you can find market leaders. The industry’s successful because it isn’t based on low salaries or low standards, but because it offers the best and most sophisticated products. That is our advantage, and we must preserve it. Some sectors have been hit particularly hard by globalisation. You just mentioned two of them, textiles and shoes. But even in these sectors European companies can find a niche, and that’s what the game is all about. If somepeople think Europe should produce t-shirts to beat the Chinese competition – they’re wrong.