Business leaders urge EU restraint on social harmonisation

Demonstration on social cuts

At a time of growing cynicism towards the EU, corporate leaders are pointing to the clear need to complete economic integration but are reluctant to delegate national sovereignty on social policy to the EU, according to a new survey of 2,000 business people released on Wednesday (29 June).

Presenting the findings at a conference in Brussels, Professor Ludo Van der Heyden from French business school INSEAD, one of the authors of the report, said that strong welfare systems were seen positively by businesspeople but had to remain in the hands of member states.

The rate of support for social, educational and health policies ranges from 41-44%. Even those who advocate a common model are very much divided over which one to adopt.

"Perhaps respondents feel that the economic and monetary processes to which they have already committed should be brought to maturity before they embark on new and distinct endeavours, such as social uniformity," reads the INSEAD report, which is co-authored by Booz & Company and the European Executive Council.

Stay focused on economics

In the view of the 2,000 corporate leaders polled, the EU should stay focused on economics. Brussels, they say, adds value particularly with regard to trade, monetary policy and budgetary policy.

In addition, they see the EU as having a key role to amplify the voice of individual member states when it comes to issues like climate change, energy and security policy.

On industrial policy, business leaders are evenly divided. Respondents from the energy and retail sectors are the most supportive of a harmonised industrial policy. Regardless of their home country, there is a broad consensus among corporate leaders that Europe must aggressively invest in innovation.

"Innovation is central not only to increase productivity but also to launch new products and services," said Maria Joao Rodrigues, a professor of European economic policies, adding it was the only way to create more and better jobs.

The survey points out that innovation can drive EU growth over the next 20 years thanks mainly to greater collaboration between universities and companies, increasing the share of applied research and creating cross-border centres of excellence.

"Competitiveness depends a lot on creativity and creativity is triggered by mobility," noted Rodrigues, who advocated extending the ERASMUS exchange programme to all students, not just the elite.

Agreeing with Rodrigues, Walter Huber, senior vice-president for human resources at Siemens, stressed that companies face much resistance from the workforce.

"Expatriation should not be a luxury good for enterprises so that they can move talent," Huber argued, saying companies incur in large bills when moving people from country to country.

This would call for better coordination of policy instruments, added Rodrigues, suggesting that companies lead by example by recruiting young people who have followed studies in more than two countries.

Unemployed, women to tackle workforce decline

Corporate leaders also reckon that subsidies will be needed to further integrate women and the unemployed into the labour market and compensate for the decline in the European workforce, which is expected to decrease by roughly 20 million workers between 2020 and 2060.

57% of respondents also supported immigration as a way to solve the demographic challenge. But two-thirds of business leaders didn't agree that enlarging the EU to include high-growth countries would fuel economic growth across the region. Obviously referring to Turkey, the majority believe the EU should not be enlarged further before 2030.

Their sentiment was echoes by Valéry Giscard d’Estaing, former president of France, who said the Union was already big enough and needed a new political structure before it includes more countries.

 

Crisis-hit EU countries have adopted highly unpopular austerity measures since the start of the financial and economic crisis in 2008.

The European Commission has developed a blueprint for growth, the 'Europe 2020' strategy, which it believes will set Europe on the path to economic recovery.

As reported by EURACTIV, a number of stakeholders have argued that the Europe 2020 strategy does not have a sufficiently strong social dimension in its current guise (EURACTIV 10/03/10).

Subscribe to our newsletters

Subscribe
Contribute