Flemish business: ‘Name and shame’ inefficient governments


European governments that fail to cut red tape, reform their labour markets and implement key elements of the knowledge economy should be publicly shamed, Jan Buysse of the Flanders Chamber of Commerce and Industry told EURACTIV in an interview.

Jan Buysse is senior advisor for EU affairs at Voka, the Flanders Chamber of Commerce and Industry. 

He was speaking to Gary Finnegan.

To read a shortened version of this interview, please click here

What should be the key elements of the strategy to replace the Lisbon Agenda? 

The Lisbon strategy has achieved few concrete results. The priorities lacked a clear thematic focus as well as a formal structure to make them enforceable. We have four concrete recommendations for a more successful project. We want to see a pact for growth and jobs, investment in technologies of the future, a Community patent, and unhindered access to top foreign talent. 

What would you expect from a new ‘growth pact’? 

It is impossible to continue the current Lisbon Strategy as ‘business as usual’ post-2010. The new strategy needs to make a very clear break with the previous strategy and should offer a greater guarantee of success by focusing entirely on strengthening the knowledge economy and making its implementation more binding. 

A limited list of objectives and targets, narrowly focused on strengthening the knowledge economy, should be translated, by analogy with the Growth and Stability Pact, into a proactive Pact for Growth and Jobs. 

Each year the performance of the different member states should be placed side by side and should be compared and ranked on a ‘naming and shaming’ basis. Member states will thus be put under greater pressure to carry out necessary, but not always popular, reforms. 

What do you see as the technologies of the future? 

A lot of money is invested in R&D in such future-oriented sectors as biotechnology and nanotechnology but when it comes to commercialisation, politicians tend to keep their purse strings tight. 

The result is that innovation and valorisation are seemingly locked up in a European paradox: high-level scientific research that is used very little for the purpose of innovation and economic growth. These markets are at risk of being swallowed up by our global competitors. 

The EU needs to be more consistent. And in order to achieve that consistency, it needs to eliminate a number of taboos. If it wants to be a forerunner in globalisation and to follow through its ambition to be the most competitive and dynamic knowledge economy, it also needs to facilitate the marketing of these types of future-oriented technologies. 

Are you optimistic about progress on a community patent? 

After ten years of negotiations, there is no sign of any agreement within the European Council regarding the European Community Patent. The case has now become a symbol of the sticky nature of the EU decision-making process, whereby the individual interests of a few member states take precedence over the collective interests of the EU; it is also symbolic of the limited decision-making capacity of the Lisbon Strategy. 

The timely introduction of a uniform and low-cost Community patent for companies within the EU, however, would represent a real breakthrough resulting in a decisive, proactive Lisbon Strategy that offers a greater guarantee of success. 

How can access to qualified staff be guaranteed?

Europe needs to make sure it is sufficiently well armed for the global ‘war on talent’ by enhancing its ability to attract foreign top talent. 

Following the example of the US, Europe needs to simplify access for highly qualified migrants by introducing one single uniform ‘blue card’. This card should replace all existing national systems and guarantee the free circulation of top talents within the internal market. 

What part could flexicurity play in making Europe more competitive? 

Flexicurity and Lisbon run parallel to each other. Because flexicurity plays an important part in developing a revised Lisbon Strategy that has a greater chance of success, its implementation by the member states and regions must be given a more prominent place. 

‘More Europe’ here means greater pressure from the EU on the member states to implement the necessary reforms of their labour markets, labour market policies and social systems. 

In order to achieve this, the Commission should set up an annual Scoreboard for Flexicurity which lists and ranks the performance of all the member states and devolved regions in terms of the ‘flexibilisation’ of their labour markets (activation), lifelong learning initiatives (employability), sustainability of social systems and labour costs. 

You are a strong advocate of cutting red tape, which is part of the Small Business Act. How can progress in this area be measured? Is it dangerous to cut too many regulations? 

Europe is often associated with bureaucracy, over-regulation and protectionism. The total ‘acquis communautaire’ now comprises 100,000 pages. This is true. And Europe should overcome this. This perception, however, should be put into a broader perspective. 

The core of internal market policy involves – via harmonisation, co-ordination or mutual recognition – the reduction of 27 national/regional rules into one single set of rules based on which goods, services, people and capital can circulate freely and smoothly within the EU. 

Moreover, the operating range of the EU has expanded considerably over the years, and this has inevitably brought with it an increase in EU regulations. Finally, it is our government members that decide, within the European Council, on initiatives from the European Commission. It is often the case that when member states and regions implement the approved EU regulations, they impose additional conditions and introduce so-called ‘national headings’. It is these additions that largely undermine the philosophy and effect of having one single set of rules within the EU. 

Therefore the EU should put pressure on the member states to simplify their regulations too (when implementing the European agreements) and to minimise the administrative burden by setting up an annual Scoreboard of Administrative Burdens. 

In order to get the member states to improve the efficiency of their government apparatus, it is necessary that the Commission publishes an annual Scoreboard of Government Efficiency. 

What can be done to improve access to the internal market for SMEs? 

The internal market forms the heart of the EU integration process; it functions, above all in times of crisis, as a driving force for economic recovery and transformation. 

Strengthening and deepening the European domestic market is at the core of the Lisbon Strategy that will be reviewed; it also underpins the European approach to the financial and economic crisis. 

The EU and its member states need to remove all the existing fiscal barriers as quickly as possible. At the same time it must guarantee that new regulations will not impede the internationalisation of companies. 

There is an urgent need to simplify and modernise the current VAT system. This most typically European of all taxes still causes far too many obstacles to the optimal utilisation of the internal market. 

The common, consolidated corporate tax base (CCCTB) should be implemented as soon as possible. In the meantime, fiscal compliance (including transfer pricing) should be simplified. 

Is the internal market working for small businesses? 

We need to move from free movement of goods to fluid circulation. In order to ensure maximal physical access to the internal market, the EU supports the creation of those Trans-European Networks (e.g. the Iron Rhine and the Schipdonk Canal) that are of significant importance for Flanders by co-financing these projects and by eliminating the current (political) obstacles. 

The EU is working towards the creation of a uniform framework for traffic taxation that is based on the interoperability of the different taxation systems, fair competition among all modes of transport and maximum physical access to the internal market. 

The EU encourages the use of extra long road rigs or ‘Ecocombi vehicles’, a kind of mega lorry that has been internationally proven as an environmentally-friendly form of transport providing efficient logistics. At the same time the EU should ensure the ongoing development of intelligent environmentally-friendly infrastructure initiatives such as encouraging pipelines between clusters. 

The European Commission is focusing strongly on ensuring the timely and complete implementation of the services directive in all member states and regions of the EU. The remaining restrictions to the free circulation of workers from Central and Eastern European member states are anti-European and unnecessary. 

How have businesses in Flanders been affected by the financial crisis? 

As all European regions, business in Flanders has been affected by the financial and economic crisis. 

For a small and open economy like ours, the ghost of economic protectionism or nationalism rearing its head is extremely damaging. 

What are your hopes for the Belgian Presidency of the EU in the second half of 2010? 

A ‘good’ president has to assure that the EU machinery is running smoothly. It finds itself in a privilged position to negotiate with all key stakeholders involved in trying to find consensus on concrete dossiers. It may also represent the EU in all international top meetings. 

It also means putting its individual interests aside for the benefit of the general interest of the EU. 

In doing so, a good president has to stimulate a good perception and image of his country and region within and outside the EU. 

Notwithstanding the fact that the EU agenda is a running agenda in which an individual Presidency can not intervene too much, the Presidency can however use its power to give extra priority to specific dossiers. 

Voka expects from the Belgian Presidency to deal with our priorities mentioned and more specifically to focus on the development of a genuine knowledge economy through the Lisbon Strategy, Community patent and so forth. 

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