This article is part of our special report European Business Summit.
European companies’ competitiveness is hampered by unnecessary burdensome legislative instruments in climate, energy and environment and policymakers must rebalance industrial strategies towards manufacturing, BusinessEurope president Jürgen Thumann said in an interview with EURACTIV. The European Business Summit (EBS) begins today (15 May).
With Europe’s manufacturing output now 10% lower than before the crisis, the prosperity of the continent is at risk and “has been left unaddressed by policy-makers for a too long time,” Thumann said.
If the Commission is to fulfil its aim of returning European industry to 20% of total GDP – it now stands at 16% – then improving access to finance and better translating skills into employment are priorities for politicians, Thumann said.
The clear priority to boost productivity that BusinessEurope is highlighting is the need for the EU to reassess its approach to energy policy however, said the former head of the German employers’ organization BDI.
"European companies are suffering from the negative effects of green tape," said Thumann, slamming the Commission for its inclination to develop 'unnecessary burdensome legislative instruments in climate, energy and environment policies.'
European business is carrying the burden for the world
“We need to learn from the high cost lessons of the current EU policy while taking “game changers” – like the shale gas revolution and the very limited progress in global climate talks – into account,” the business chief said, without directly endorsing shale exploration.
He said that unless energy policy is “cost-competitive, reliable and climate-friendly”, Europe will not achieve its 20% industrial GDP target nor its 2020 climate targets.
European companies are carrying the burden of global regulation, when Europe’s share of total global greenhouse gas emissions is just 10% to 11%, Thumann said.
“The costly EU climate policies and our unilateral approach have not led to the success of the ‘leadership by example’ role that the European Commission had promised,” he added.
Thumann insisted that European companies remain committed to the fight against climate change, but added: “In the light of the lacklustre results from UN climate negotiations, the EU must rethink its own energy and climate policies."
Technology is the solution
Technology should be the driving force to deliver on energy cost-competitiveness, security of supply and climate action with the ambition of maintaining a strong industrial base in Europe.
Thumann’s message is likely to be repeated by other business figures at the business summit (15-16 May) which will see businessmen mix with Europe’s leading policymakers, including Commission President José Manuel Barroso and Council President Herman Van Rompuy.
Two of the summit’s key sessions will directly address the energy policy issue, one addressing energy as a “driver for growth”, and another “shale gas and the future of energy in Europe”.
The summit will give business leaders the chance to add their voices to a growing political chorus demanding rebalancing of Europe’s climate policies.
EU leaders will grapple with controversial issues including shale gas development and climate change mitigation at an energy summit on 22 May, when they meet to discuss how to lower energy prices and improve the Union’s industrial competitiveness.
The Draft Conclusions say that the EU's goal is to ensure “a level playing field for business and industry”, so they can compete in the global marketplace, having regard inter alia to the impact of carbon leakage.”
Trade and materials also on the agenda
“Carbon leakage" is jargon for the relocation of European businesses abroad because of the comparative advantage they may gain from looser climate regimes.
Leaders are also expected to task the Commission to assess a “more systematic recourse to indigenous sources of energy, both conventional and unconventional”.
Unconventional sources usually refer to shale gas, which many believe has triggered an industrial revival in the USA, but is viewed with suspicion by several EU countries.
Other key issues on the agenda of today’s business summit are trade policy and Europe’s supply of raw materials and resources.
“Europe is import dependent on almost all industrial raw materials so we need to ensure free trade and open markets globally,” Thumann said in the interview.