Big business demands accountability on EU 2020


The biggest names in European industry will monitor the implementation of pro-growth reforms as part of a concerted push to force political leaders to follow through on their commitments.

Frustrated by the failure of the Lisbon Agenda, big business has stepped in to force Brussels and governments across Europe to deliver on political promises designed to improve Europe's competitiveness in the face of mounting challenges from climate change, an ageing population and Asian rivals.

The European Round Table of Industrialists (ERT) has launched a comprehensive paper entitled 'Vision for a competitive Europe in 2025,' which urges governments to cut public spending in a number of areas.

"Many political leaders make European commitments but by the time they cross their own national border they forget about it. If Europe wants to be competitive in 2020 or in 2025 then that should not happen," Wim Philippa, ERT secretary-general, told EURACTIV.

He said a failure to communicate with member states on their responsibilities under the Lisbon Agenda led to failings in implementation.

The business group is also underlining the urgent need to encourage young people to study mathematics, technology and the sciences – even offering to throw its financial weight behind educational initiatives in member states.

"We very much support the creation of a European coordinating body for education to promote MST [maths, science and technology] starting in primary school. We are prepared to play our part – financially – in cash and in kind," Philippa said.

Urgent reforms needed

Industry is warning EU leaders that fundamental reform of social and healthcare systems is urgently needed to put the bloc on a path to sustainable growth.

The EU could be a "global champion of sustainable growth," according to the ERT, but national budgets must be balanced and long-needed reforms pursued with vigour.

The group represents household names in the energy, pharma, food, chemicals, tobacco and auto sectors, such as Renault, Unilever, Nestlé and British American Tobacco.

It lays out a series of sweeping policy measures which are needed if Europe is to be an attractive place to live and work in the next two decades.

The European Commission should ensure respect for the Stability and Growth Pact by all member states and encourage public budget surpluses over a sustained period of time, according to big business leaders.

"This should be financed by cutting public expenditure on policies that are not sustainable," the paper says, pinpointing the need for an EU-wide independent assessment of public pension systems with a view to mapping a course for an overhaul.

Greater personal responsibility for healthcare costs

Industry also wants changes to social security systems "to strike a better balance between social cohesion and financial sustainability". This could include making patients responsible for their own healthcare costs rather than leaving governments to pick up the tab.

Many of the proposals are likely to be met with resistance from interest groups for which any changes to Europe's social safety net are anathema.

Similarly, the call to adapt EU agricultural policy "to reduce its impact on the EU budget" is unlikely to find favour amongst farmers' organisations.

In line with the current zeitgeist, big business makes much of the need to invest in research and development. The EU budget should be rethought, it says, to put competitiveness and sustainability at its core.

The paper calls on policymakers to introduce "innovative infrastructures, technologies and energy sources," and reiterates the need to reform Europe's intellectual property regime.

Some of the suggestions put forward by the industry lobby are already on the horizon, such as a call to "reinvent public procurement," which is likely to feature in the EU's forthcoming innovation action plan.

The link between R&D investment and underlying global economic drivers – or "megatrends" – should be strengthened as part of a more deliberate use of public investment in innovation, according to the ERT.

Climate agreement and carbon trading essential

Considerable time is being devoted by large firms to looking at eco-innovation as a source of wealth generation as well as reducing their carbon footprint.

Industry wants the EU to set clear targets for energy efficiency and progressively adapt them in line with technological developments "and on the basis of a full life-cycle analysis". This should take account of resource, environmental, social and economic aspects, it says.

As part of the move towards a low-carbon economy, business leaders want progress on the development of a global carbon market by linking the EU's emissions trading scheme (ETS) with other developed country systems, particularly in the US.

The paper also wants to find ways to reduce the Europe's dependency on raw materials though investment in research into technologies and recycling techniques.

'Quick wins' in 2010

The industrialists have also published a list of "quick wins" that can be achieved in the next 12 months to give clear signals to the business community.

These include the completion of a legally-binding international climate change agreement, the publication of an "ambitious and realistic" EU 2020 strategy, and enhanced links between the business and education sectors.

The paper also pushes predictable free-trade arguments, calling for the completion of the internal market, the reduction of tariffs to stimulate international trade, and staunch resistance to "protectionism and deglobalisation".

"By 2025 the 'spaghetti bowl' of preferential trade agreements should be converted into a global zero-tariff regime," according to the group, which includes some of the world's largest multinational corporations.

"Our vision is maybe not completely visionary but it must be realistic. It would not be useful to predict a world in 2025 which is unreachable. It may be partly repetitive, it may be partly known or familiar but we indicate that if these objectives are not met, then we will never reach the target," said ERT (European Round Table of Industrialists) Secretary-general Wim Philippa.

Leif Johansson, president of AB Volvo and ERT chairman, said the real key to making EU 2020 work is "execution".

"There was nothing wrong with the Lisbon Strategy. The problem was in the delivery by member states and the EU," he said.

Johansson said there is little point in announcing a new strategy unless progress is actively monitored. To help achieve this, the ERT has launched a website to track implementation of its vision for a competitive Europe.

Gerard Kleisterlee, president and CEO of Royal Philips Electronics and vice-chairman of the ERT, said Europe needs bold policy thinking if it is to face up to "megatrends" such as demographics, urbanisation, globalisation and climate change.

"Unless action is taken, our ability to provide quality employment will suffer. We want Europe to remain an attractive place to live and work in 2025 but urgent and far-reaching changes are required now," he said.

He added that Europe needs to speak with one voice in external relations and the EU should have just one seat in international economic organisations.

Former EU Commissioner Mario Monti, who is currently working on an official report aimed at reviving support for the internal market, said if Europe is to have a united position in external affairs it must avoid speaking with "a cacophony of voices" at home.

European leaders, he said, have a bad habit of blaming the EU rather than accepting responsibility for joint decisions they have taken in Brussels.

However, Monti said Europe has emerged from the crisis with enhanced prestige as its social market economic model are now taken more seriously and its companies and citizens are not as indebted as those in the US.

Miguel Sebastian, Spanish Minister for Industry, Tourism and Commerce, said structural reforms are needed in Europe given the challenge of emerging economies in China and India.

He said Spain would push for progress on the Doha round of international trade talks and is prioritising the digital market and liberalisation of the energy market.

Sebastian also noted that Lisbon is not seen as a "complete failure" by member states and that some moves in the right direction have been prompted by the strategy.

However, he acknowledged that more robust accountability measures will help implement EU 2020 – the successor to the Lisbon Agenda. "Business works towards quantitative measures of progress whereas governments do not always take that approach. I think that's wrong. We should have long-term targets," he said.

In addition, he stressed that Europe must "keep industry alive" rather than rely entirely on the services sector as a source of growth.

The EU is in a period of reflection as it works to chart a course towards sustainable growth. A consultation exercise on the 'EU 2020' strategy – a successor to the Lisbon Agenda for Growth and Jobs – closed on 15 January.

A series of foresight exercises have emerged in recent months, attempting to get a picture of what the world might look like over the coming decades. The European Commission published 'The World in 2025' last year, predicting that Asian economies will overtake the EU and US to become world leaders in research (EURACTIV 25/09/09).

Around the same time, staff at the European Parliament's policy section produced a series of forward-looking papers teasing out ways to make the EU more efficient (EURACTIV 07/01/10).

Long-term pressures from increasingly competitive developing economies and climate change have been compounded by the economic crisis and could force governments into radical reforms.

  • 11 Feb. 2010: Informal EU summit to tackle economic crisis and map out 2020 strategy. 
  • June 2010: EU summit expected to approve final strategy.

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