CC INTERVIEW “EU industrial electricity prices remain more than twice those in the US and Russia, and 20 per cent higher than in China – these cost differentials undermine industrial investment in the EU. This is a serious challenge for many industrial sectors in Europe. Our industrial companies are losing ground in terms of global market shares and investment leakage has already been happening for a long time. The EU’s main competitors take strong actions to promote their industrial policy objectives, and Europe needs a renewed industrial strategy that looks at competitiveness in all its dimensions, which must be backed by a coordinated action plan and an ambitious timetable.” Despite being a major global destination for Foreign Direct Investment (FDI), the EU’s share of worldwide FDI fell to 24 per cent in 2015 compared to 48 per cent in 2000. “This is a real warning signal. Despite all its strengths, the EU is still perceived as a complicated and expensive place to invest in. High taxes, energy prices, non-wage labour costs and burdensome administration are among the negative factors. Small and medium-sized businesses are affected even more than larger companies. Making better progress on the digital single market, the energy union and the capital markets union is essential for European companies.” Now that the UK has formally opened proceedings to leave the EU, it remains to be seen how Brexit will concretely affect the
bloc as well as foreign business operators set up in the UK. Ms Marcegaglia explains that EU and UK economies are profoundly interconnected – “41 per cent of total UK exports go to the EU, representing 11 per cent of British GDP, whilst seven per cent of total EU exports go to the UK, representing less than four per cent of the EU’s GDP. This compares with intra-single market trade amounting to 27 per cent of EU GDP.” The BusinessEurope president adds that the UK’s decision to leave the EU opens up factors of uncertainty, especially for the business community, making it essential to organise the UK’s exit from the EU in an orderly and constructive manner. “We are still in the process of assessing the impact of Brexit, but we already see some issues of concern for a number of sectors, such as customs procedures and the possibility of regulatory divergence in the future. As business, we have an interest to maintain as close economic relations as possible between the EU and the UK, while preserving the integrity of the single market and its four freedoms. BusinessEurope and its member federations from all over Europe are ready to play a constructive role in the search of solutions to establish a sound and balanced new model for EU-UK relations.” Ms Marcegaglia’s tenure as president of BusinessEurope happened to take place at a very trying time for the EU. She asserts, “it is an honour but also a great responsibility to take up the role of
“As business, we have an interest to maintain as close economic relations as possible between the EU and the UK, while preserving the integrity of the single market and its four freedoms.” president at BusinessEurope. I must admit that my presidency is taking place during very challenging times.” Brexit and the work done in the aftermath of the referendum is one such time she felt intrinsically part of a historical process, but another experience she’ll be unable to forget is the EU-Canada free trade agreement. “This agreement was finally ratified in the European Parliament at the end of last year, opening the way to its provisional application. This is a positive historic success for us. The agreement with Canada is the most progressive agreement concluded so far by the EU. We are convinced that it will become an engine of economic prosperity for the EU and Canada, and it will also bring our people and cultures closer together,” she concludes. “To defend unanimously-agreed positions of European companies in difficult moments, such as after the British referendum, and to be part of the historic achievement beneficial for Europe, namely the agreement with Canada, is actually the best reward for me as BusinessEurope president.” cc
“The [EU’s] agreement with Canada is the most progressive agreement concluded so far by the EU.”
APRIL / MAY 2017
The Official Business magazine of the Malta Chamber of Commerce, Enterprise & Industry since 1947.