Associations seek opportunities from crisis

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Membership of industry associations can help business to emerge from the economic crisis, argued participants at a conference in Brussels last week (29 April).

Urging business to use associations as a “joint platform for being creative,” Susanne Zaenker of AISE, an association representing manufacturers of soap, detergents and maintenance products, told the 2009 edition of Kellen Europe’s annual Euroconference that the crisis presents a “unique opportunity for associations to take the lead in proposing concrete measures to boost skills”. 

“We can be quicker and more effective than governments here,” she argued. 

Echoing her comments, Alfons Westgeest, managing partner at Kellen Europe, said associations could help business to cut costs by assuming more of their members’ workload. 

Calling on federations and business to work together to define “who does what,” Westgeest said “associations might have to pick up work that is no longer possible in companies, rather than duplicating efforts”. 

“But it’s a delicate balancing act,” he warned. 

Opportunity for associations to be ‘pro-active’ 

This view was echoed by business representatives themselves. “This is the moment for associations to make sure that they are pro-active and contributing in a business way, and not just collecting their members’ ideas,” said Hanns Glatz of German car giant Daimler. 

“There is an opportunity for associations to replace some of business’s functions,” he added. 

Others sounded a cautious note. “It’s not OK for companies to behave differently to their associations,” argued Christopher Burghardt, vice-president for corporate affairs at Anheuser-Busch InBev. “I see associations as an extension of my company’s arm, and we need to behave in one and the same way,” he said. 

Europe ‘more affected’ than US 

“Europe seems to be more affected by the crisis than the US,” observed Business Europe Director Marc Stocker, a fact which he described as “striking” given that the turmoil began in the States. 

Giving his reasons for this, Stocker cited Europe’s higher level of exposure than America to the collapse of global trade and its higher level of corporate indebtedness. He also said Europe’s fiscal and monetary stimuli were taking longer to have an effect than America’s own recovery plan. 

The business chief said he expected banks to “remain cautious in future,” because European companies had invested more and thus had more refinancing needs than their American counterparts. 

Stocker called on the European Commission to “be strong” in ensuring that state-aid and competition rules were being respected in national stimulus plans. 

Indeed, Daimler’s Glatz said it was important for companies to continue their involvement with associations at a time when the EU institutions are producing a raft of important legislation. 

“We are not terminating our association memberships, because environmental legislation is still coming off the pipeline,” he said. 

“There is a terrible fight within governments and the Commission between keeping business running and maintaining environmental and social standards,” Glatz explained. “Companies need to stay members of associations to make sure they can live with the solutions.” 

Indeed, earning the recognition of decision-makers and the media are among the main concerns of federations at the moment, according to a EURACTIV survey presented at the conference (EURACTIV 08/04/09).  

The survey found that over 40% of federations have 50-plus members, with membership levels expected to remain stable in the years to come. 

Warning that "we are not completely on the road to recovery yet," BusinessEurope Director Marc Stocker said the world was experiencing "its worst recession since the 1930s". 

"The pool of bad loans has grown rapidly during the crisis, which will only serve to intensify it," Stocker continued, lamenting that "the benefits of openness are hidden". 

"There is clearly more household debt in the US than in the EU, but Europe's corporate sector is much more indebted than America's," he said. 

Such pessimism was echoed by Alfons Westgeest, managing partner at Kellen Europe, who said "we only need to pick up a newspaper to see that the crisis is all around us". At such times, "it is important to learn from one another," he added. 

Christopher Burghardt, vice-president for corporate affairs at Anheuser-Busch InBev, said the crisis had shown that business was turning to national governments, rather than the EU, for help. 

"It's dangerous to live in Brussels and fail to look beyond the institutions," Burghardt warned, adding: "Don't look too far ahead in the EU legislative agenda, because most legislation is put on ice anyway". 

But Hanns Glatz of German car giant Daimler disagreed with this assessment. "The EU will remain important, because the Treaty of Lisbon will increase its competences further, for better or worse. Membership of European associations will continue to be of value." 

"Corporations are being more demanding on their associations than usual" in the wake of the crisis," said Marta Baffigo, director of European public affairs at Kellogg's

Baffigo believes businesses must become more selective in choosing which associations to join. "We are only members of ones in which we can be effective. You must be focused in your membership, and you must engage with your association, or you won't get anything out of it. You get out what you put in." 

Maarten G. Labberton of the European Aluminium Association warned that a protectionist trend in Europe would impact upon industry and trade associations too. "A national focus will affect solidarity between national associations too," he said. 

Kellen Europe Vice-President Maria Teresa Scaradigli said EURACTIV's survey on public affairs memberships had shown that federations' Brussels offices "remain small in terms of staff," with the "vast majority" (80%) preferring a stand-alone structure. 

EURACTIV Public Relations Director Dan Luca said the survey had shown that "consultants and federations find specialised EU affairs media most important for external communication," but business "seems to prefer international media, most probably read in headquarters". 

"Blogs are seen as a good platform for gathering experts and other stakeholders, rather than as a risk," Luca said, before adding: "Consultants are more blog-oriented than federations and corporations, while monitoring is still the main activity, instead of pro-active use."

The 2009 edition of the Euroconference, hosted by Kellen Europe, gathered stakeholders from industry federations and the corporate sector to discuss the challenges facing federations in the coming months. 

EURACTIV's 'Federations Survey 2009', presented at the conference, had found that most industry federations and their members agree that the ability to influence EU policy by lobbying is federations' biggest added value for business at a time of economic crisis (EURACTIV 08/04/09). 

Factors that are expected to drive demand for public affairs this year include the need for firms to reposition themselves to cope with the ongoing economic crisis, the transparency initiative launched by Administration and Anti-Fraud Commissioner Siim Kallas in 2005 (see EURACTIV LinksDossier) and the EU elections. 

EU citizens are poised to elect a new European Parliament in June, while a new EU executive is expected to be appointed in the autumn (see EURACTIV LinksDossier). 

Last year's Euroconference had seen the presentation of EURACTIV's previous such survey, which found that finding the right balance between the Brussels and national perspectives are crucial when communicating on EU policies, while blogs and video clips are becoming an increasingly popular means of communicating online (EURACTIV 29/02/08). 

Kellen Europe, an association management firm, provides management and coalition-building services for industry associations and special interest groups. 

  • June 2009: Elections to the European Parliament. 
  • June 2009: EURACTIV workshop on trends in public affairs.

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