According to IHS, the supply chain law puts Europe at a competitive disadvantage

IHS President Bonin calls for cooperation and development assistance with important supplier countries. In addition, higher energy prices are likely to have a long-term impact on Europe.

The head of the Institute for Advanced Study (IHS), Holger Bohnen, criticized the supply chain law passed by the European Union last week. “Europe is putting itself at a competitive disadvantage,” Bonin said in an interview with Oberösterreichische Nachrichten on Wednesday. The basic aims of the law are positive, but trying to impose better environmental and social standards across European companies only makes sense to a limited extent.

Even the EU's assumption that companies will fully understand their supply chains is difficult. “These are very complex networks that are constantly changing. We are not just talking about the immediate supplier, but also about the subsequent supplier, etc.,” says Bonin. The desire to capture these structures through this law is “very static and does not do justice to the facts.” “Accordingly, it cannot work like this.”

The economy is weak

For Bonin, it would make more sense than trying to export environmental and social values ​​and standards through European companies to engage in development aid and cooperation with countries of origin and thus help raise standards. Otherwise, there is a risk that companies will simply move from countries with the lowest standards to supplier countries with the second or third lowest standards.

Overall, the European economy is currently not recovering as expected due to the continued rise in interest rates and energy prices. The industrial situation is particularly bad in Germany, but Austria is performing slightly better than its neighbour.

However, energy prices are likely to continue to cause problems for Europe. “It is quite predictable that energy will remain expensive in Europe, which makes it even more important to adapt networks and business structures so that you have at least minimal high costs,” Bonin said. Austria's top priority is to find an alternative to Russian gas. When it comes to electricity, “European infrastructure without national barriers” is also needed, the IHS boss said. (Abba)