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EU matters interview national levels. Industry is still suffering from costly overregulation in several policy areas such as EU environmental legislation, Single Market regulation or tax law. Much needs to be done to achieve a substantial and sustainable revitalisation of industrial competitiveness. The Competitiveness Council meeting on 2–3 December 2013 adopted conclusions on industrial policy, smart regulation and on Single Market development. These conclusions must pave the way to a meaningful industrial compact at the European Council in February 2014. Words must be put into actions if we really mean to increase industry’s share of production to 20% by 2020. BUSINESSEUROPE is currently preparing a study and a set of targeted policy recommendations for the February 2014 European Council. The study will be launched at the end of January. Our central message is that Europe needs an overarching, reliable industrial policy framework that allows companies to be more competitive internationally. We must genuinely put industrial policy in the focus of all EU policy areas and at all levels. This must be made visible through real delivery of the better regulation agenda to ensure a significant reduction of administrative burdens. It is imperative that all EU Commissioners must feel responsible for improving European competitiveness. Also the Competitiveness Council must play a much stronger role as the guardian of coherence in policy and dare to fundamentally change or stop proposals that damage the competitiveness of the European industry. European companies argue that the future European industrial compact must be backed by a vibrant Single Market, including in its digital dimension. But new jobs will not be created if we put unnecessary burdens on businesses in the Single Market. Europe will not be strengthened if we penalize best export performers. There is no time to waste. We must spare no effort and act to improve the investment climate and restore industrial competitiveness throughout Europe. What do you think holds the EU competitiveness back the most? Are that high energy prices, burdensome regulation or green policies? There are a number of factors here. The current EU energy and climate policy is inevitably contributing to an increase in energy prices and widening the gap with major competitors such as the US. Electricity prices for industry have increased by 37% in Europe between 2005 and 2012, while the corresponding change in the US was minus 4%. This was the result of a predominance of climate objectives in Europe, underestimating the huge implications on energy prices. Climate policy needs to be continued, of course, but to get the balance right Europe also has to reinforce two other pillars: cost-competitiveness and security of supply. We must also see that there are untapped opportunities in strengthened energy policy coordination among Member States. Uncoordinated actions (such as the German nuclear phase out or the UK’s carbon floor price) have significantly

higher costs; therefore Europe needs a dedicated consultation mechanism between Member States before national decisions with potentially wide consequences for neighbouring markets are taken. We are not asking for more Europe, we asking for better. The completion of the internal energy market is a priority to ensure fair competition in traded electricity and gas. For this, stronger efforts regarding the financing and development of cross-border electricity and gas interconnection are urgently needed. Massive investments of around 200 billion EUR are necessary by 2020 for energy transmission projects of European interest. Modernising and expanding energy infrastructure will also be a key component of Europe’s competitiveness. European companies are convinced that the EU energy mix will continue to rely on a range of energy sources – oil, gas, coal, nuclear and renewables – therefore all will have to develop and modernize. Let me highlight one more important issue here as your question also mentioned burdensome regulation. BUSINESSEUROPE supports the Commission’s initiative to evaluate all EU legislation and assess if there are unnecessary burdens or inconsistencies which can be repaired. We have sent the European Commission a list of legislation that is particularly burdensome for SMEs earlier this year. On that list we call for issues such as the simplification of VAT legislation, to remedy overlaps and inconsistencies in EU chemical legislation, to simplify waste rules and rules regarding the posting of workers. It is equally important that subsequent simplification proposals really reduce burdens for business; that the Council and European Parliament share this objective and do not add additional burdens in the form of amendments. The same applies to the Member States: they should avoid “gold plating” EU legislations, thus reducing their companies’ competitiveness. What measures would help to restore EU competitiveness? BUSINESSEUROPE has five key recommendations to support industrial competitiveness. First of all the EU needs to reassess its approach to energy. We need to learn from the high cost lessons of the current EU policy while taking “game changers” – like the shale gas revolution and the very limited progress in global climate talks - into account. Our energy policy needs to be cost-competitive, reliable and climate-friendly or Europe will not achieve its 20 industrial GDP target nor its 2020 climate targets. An ambitious and competitiveness-driven internal and external trade policy agenda is also a priority for growth and jobs. Opening foreign markets should be the motif of an ambitious EU free trade agenda targeting current and emerging trading partners. The priority in this area is the conclusion of a growth enhancing, ambitious and comprehensive Transatlantic Trade and Investment Partnership with the United States. Equally important is to secure the supply of raw materials at competitive prices. Europe is

import dependent on almost all industrial raw materials so we need to ensure free trade and open markets globally. It is essential to reduce export restrictions on raw materials applied by some countries and to ensure that EU environmental and other legislation does not undermine or increase the cost of imports of raw materials into Europe. Improving access to finance is vital for industrial companies and economic growth. Therefore European financial market reforms need to balance safeguarding financial stability and financing needs of companies without generating undue negative impacts on lending. Last but not least, ambitious labour market reforms are needed to increase productivity and employment. These can also help reduce the structurally high levels of youth unemployment. We also need to translate skills into employment better. Europe must invest in education to boost productivity. The availability of a skilled workforce is essential to improve industrial competitiveness and innovation. 2014 will be a year of big changes in the EU as the European Parliament elections will take place and new European Commission will be formed. What are BUSINESSEUROPE priorities for 2014? I guess I’ve already mentioned them: strengthening competitiveness in energy and climate policy; opening foreign markets and unleashing the potential of the Single Market; promoting co-operation for innovation; expanding transEuropean (and national) infrastructure; improving access to finance; making labour markets more dynamic, strengthening flexicurity and productivity and making education and skills fit for industry. Overall, the next Parliament and Commission must look outward at what our international competitors are doing to ensure that Europe remains a global economic powerhouse. We have lost ground during the past five years of crisis; the five years ahead should focus on regaining our global role. In what position would you like to see the European industry at the end of your mandate? I passionately believe that Europe has the means to return to growth and successfully compete at global level. But let’s make no mistake: the work to fully restore Europe’s competitiveness will take more time than the next two or four years. Much needs to be done to achieve a successful industrial renaissance process, to return to sustainable growth and create millions of new jobs for European citizens. It is work in progress and as President of BUSINESSEUROPE – working with the new European Parliament and the new Commission – I will do everything I can to help achieve these goals. Ms President, thank you very much for your time. Tomáš Hartman, Deputy Director of CEBRE – Czech Business Representation to the EU ■

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