The European Commission set out a new emergency tool to protect supply chains in times of crisis that would give the EU executive new powers, including requiring the stockpiling of critical goods and telling companies to prioritize some orders.
The new Single Market Emergency Instrument aims to ensure that essential goods can circulate within the European Union during an emergency such as the recent pandemic that shut down some supply chains, the Commission said Monday.
The new tool “will give us an inclusive, transparent, fast way to deal with future crises,” Executive Vice President Margrethe Vestager said.
As POLITICO reported, the text prohibits export bans within the EU. The Commission will be able to force EU states to build up reserves of critical goods. Firms will have to disclose some information on production capacities and stocks of crisis-relevant goods, as well as to give priority to orders for key goods. Failure to comply will expose companies to fines.
“This instrument is the opposite of a planned economy,” Internal Market Commissioner Thierry Breton said, adding that its goal is not to constantly monitor economic players. This seems to address the fear voiced by some EU countries that the text goes too far in allowing the Commission to adopt emergency measures.
“It’s fair, balanced and transparent,” Breton said.
