Businesses pledge louder voice to restore competitiveness

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The new president of BusinessEurope, Emma Mercegaglia, has promised to make the leading European employers’ organisation more ‘constructively outspoken’ and pressure Brussels to swiftly act to restore competitiveness and boost investment.

Addressing the European press for the first time as BusinessEurope’s president, Mercegaglia, the first woman to lead the Italian’s Confindustria, said a lot had been done to consolidate national budgets and restore confidence, but progress remained ‘fragile’ and implementation on crucial decisions announced a year ago at the European Council ‘is far too slow’.

European leaders are meeting on 27-28 June to discuss the state of the economy and evaluate reforms and efforts made to boost competitiveness, jobs and growth with youth unemployment high on the agenda.

Leaders are supposed to validate the European Commission country-specific recommendations, adopted last month.

“We cannot be an arena where national interests prevail,” said Mercegaglia, pointing at the governance of BusinessEurope, but also hinting at the EU political leadership.

“European heads of state and government must adopt in full the Commission’s country-specific recommendations,” she added, spelling out the urgency for stronger policy coordination.

EU ministers are currently discussing the recommendations and diplomatic sources say some countries, notably France and Hungary, are trying to amend their chapters, before they are fully endorsed by EU leaders at the summit.

“Member states have to take them seriously and increase the pace for structural reforms to give growth a chance,” she said, listing labour market flexibility, access to finance, red tape and regulatory burden.

Social unrest

The business leader warned against watering down the Commission’s recommendations as Europe’s competitiveness is not what it could and should be.

“Without enhancing growth, no solution will be found to unemployment and we risk facing divisive social conflicts,” Mercegaglia added.

EU leaders are expected to discuss youth unemployment and push for new measures to bring young people back to work or education.

Youth unemployment has reached a record 42% in Portugal and 57% in Spain as governments squeeze spending and raise taxes to try to get national finances under control, a condition for receiving international bailouts.

EU heads of states agreed in February to launch a €6 billion Youth Employment Initiative, with the aim of making it fully operational by 1 January 2014.

“We must give them the guarantee that they will be either in training, further education or employment within four months of leaving school,” European Council President Herman Van Rompuy said in a letter to EU heads of state and government.

Van Rompuy pointed out that there are huge differences in youth unemployment rates across the EU and "national politics and situations matter."

“The national job plans which you submitted to the European Commission as part of the national reform programmes also illustrate your key role,” reads the letter, underlining the need of all EU states to carve the proper reforms.

Mercegaglia argues for a combination of national and European reforms. She called for political determination to mobilise investment to support growth, but also speed up the implementation of the single market in the services.

Securing an agreement with the European Parliament on 2014-2020 EU budget means to swiftly implement a compromise, but not without optimising the use of funds earmarked for research and development, and infrastructure, such as the trans-European networks and the Connecting Europe facility. The funding for these have been slashed in the latest proposal under negotiation.

Level playing field on energy and climate

As a means to competitiveness, EU businesses also adopted a set of recommendations to rebalance energy and climate policies, which they say have been suffering from lack of coherence.

Hampered by lowered energy costs in other parts of the world, BusinessEurope argues to put on equal footing cost-competitiveness, security of supply and climate objectives.

“Through a range of coordinated actions, Europe can significantly improve its energy policy to make it more efficient,” said Markus Beyrer, BusinessEurope director-general, adding there was a need for being more open about shale gas, which has drastically reduced energy costs in the United States.

More cooperation and coordination is needed among EU countries that need to build a common energy market. Beyrer advocated for the establishment of a European Energy Agency.

The European Commission has set up a yearly cycle of economic policy coordination called the European Semester.

Each year it undertakes a detailed analysis of EU member states' programmes of economic and structural reforms and provides them with recommendations for the next 12-18 months. The European semester starts when the Commission adopts its Annual Growth Survey, usually towards the end of the year, which sets out EU priorities for the coming year to boost growth and job creation.

At the EU summit on 27-28 June, EU leaders are supposed to endorse the country-specific recommendations, presented by the Commission in May.

EU leaders will as discuss youth unemployment. In February to launch a €6 billion Youth Employment Initiative, with the aim of making it fully operational by 1 January 2014. A Youth Guarantee scheme, introduced by each EU country according to its individual need, will apply to young people who are out of work for more than four months.

  • 27-28 June: European Council

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