Stronger businesses, stronger European Union
Key message
Policy changes are needed
To deliver for society, the European Union needs strong companies as much as European companies need a strong European Union to succeed.
BusinessEurope is calling for a REBOOT in European policies, building on EU achievements, with targeted actions to tackle the structural weaknesses that are undermining companies’ efforts to deliver for people.
During the last 5 years, the European Union has focussed on dealing with the Covid crisis, the war in Ukraine and regulating the green and digital transitions. During the next cycle, the EU will need to focus on improving Europe’s competitiveness and attractiveness as a business location by:
During the next cycle, the EU will need to go beyond the reform of the European electricity market design and address structurally the energy cost differential between the EU and major competitors.
It will need to put in place a real EU energy strategy that optimises the conditions for public and private investment in:
Furthermore, this strategy should diversify our energy sources, including transition sources, and build partnerships with third country providers.
During the next cycle, the EU will need to go beyond the work started to reduce reporting requirements for companies by 25%, put industrial permitting at the top of the agenda and develop an Omnibus proposal to reduce burden by eliminating contradictions and unnecessary complexity in EU legislation.
Looking forward, it should change approach:
During the next cycle, the EU will need to carefully calibrate economic security measures to avoid a negative impact on Europe’s competitiveness and refrain from overloading trade agreements with the pursuit of other policy objectives.
As there cannot be strategic autonomy without openness, it will need to ensure implementation of existing trade agreements, making sure they remain effective and stand the test of time. It must also finalise the agreement with Mercosur as well as other ongoing negotiations and open new ones to improve market access and investment opportunities for European companies throughout the world.
The EU should continue to closely cooperate with the US, which is our first trading partner, ensuring that it brings satisfactory solutions to transatlantic trade irritants.
As de-risking takes time, the EU should not only engage with like-minded partners but also work for a balanced relationship with Europe’s second trading partner – China, ensuring a level-playing field and defending Europe’s economic interests, using all available trade defence instruments.
During the next cycle, the EU will need to put in place a fully-fledged strategy to rejuvenate and further develop Single Market integration in goods and services, including for digital and defence.
This strategy will have to remove obstacle to free movement of goods, persons, services, capital and data and create the conditions that will allow European SMEs and startups to scale up from Europe.
As a general principle, it should privilege proper enforcement of existing Single Market rules on goods and services in order to ensure a level-playing field, and only foresee new legislation when necessary to remove legal obstacles to free movement and cross-border business operations and workers mobility.
To avoid fragmentation, EU Single Market regulation should either provide full harmonisation or apply country of origin principles, with mutual recognition among
Member States.
During the next cycle, the EU will need to invest more in research and innovation, as well as improve the innovation-friendliness of its regulatory framework by ensuring it supports reasonable risk-taking and creating regulatory sandboxes to allow experimenting.
It will need to defend intellectual property and deliver a real Capital Markets Union to boost private investment in innovation and encourage companies to stay in Europe to scale up.
It will need to focus EU social policy on helping to tackle labour shortages and skills mismatches, with education and training measures, paying special attention to the skills required for the green and digital transitions and policies to activate unemployed and inactive persons.
It will need to implement the Skills and Talent Mobility package to attract needed skilled workers from third countries and make further proposals to simplify administrative procedures that employers have to undertake to hire third country workers.
Key numbers
The EU economy
is losing ground
The European economy is falling behind. In 2023, EU GDP grew by 0.5% only vs 3.1% for the US and 5.2% for China.
Having a strong economy is a prerequisite to defend our European way of life and European interests abroad.
The EU needs to put competitiveness at the forefront because it is the basis for growth, employment, investment in the green and digital transitions, as well as in infrastructure, security, social protection, etc.
From 2019-2021, foreign direct investment decreased by 68% in the EU vs an increase by 63% in the US, and greenfield investment in the EU fell by 15% vs an increase by 18% in the US in 2021-2022.
Europe’s investment needs are huge. The green and digital transitions alone require around €650 billion per year from 2021 to 2030. Both public and private money is needed. Improving the investment climate in Europe is an essential part of the answer.
Company voices
Why the EU matters
for my business
Strengthen the EU internal market!
“Aran World exports globally to 120 countries and the European market is extremely important to us. We must strengthen the EU internal market and enhance competitiveness. The first step is to legislate better for a more sustainable EU across social, economic and environmental perspectives.”
Erika Rastelli, CPO at Aran World, Italy
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