EU institutions, mainly the Commission, and the member states, while dealing with the modern challenges, are facing at the same time running difficulties connected to the present critical situation with energy, inflation and rising living standards. Some states manage these problems better than others, but some issues are still there and need resolute approaches…
= “Green deals”. There are, actually two “green deals” the EU member states have to deal with: one –from the last year – is about energy and climate, another –presently – for industry. For example, recent notorious EU “industrial green deal plan”, aimed to counterpart the US major green subsidy decision (so-called IRA; more below), has already raised controversies among two “fronts”: on one side, the EU’s economic giants (France and Germany), which want more EU money for local companies; and, on the other side, other smaller EU states, which are facing the task of creating completely new sectors of industrial economy with the financial deficiencies and too much pressure on companies.
Thus, the Commission’s general climate legislation’s features, like regulation of pesticides and chemicals, rules making firms more responsible for their supply chains, energy-saving requirements for new products, etc. provide for additional stress over national governance. Presently, the EU “green deal” is seen by many states both as “the biggest EU’s regulatory attempt in history” and as supplemented burden on the member states industries and SMS on top of present economic hardships: seemingly, money, good policies and intentions are not enough…
More in: https://www.politico.eu/article/von-der-leyen-climate-vision-minefield-european-commission-epp/?utm_source=POLITICO.EU&utm_campaign=efe422dce3-EMAIL_CAMPAIGN_2023_02_11_09_00&utm_medium=email&utm_term=0_10959edeb5-efe422dce3-%5BLIST_EMAIL_ID%5D
= As to the cross-Atlantic controversies: e.g. gaps between the US and EU are huge in all technological and scientific sphere: e.g. in the start of this century the US research-based pharmaceutical industry invested €2billion more than the EU member states; the gap has been widening presently by €25billion. One of the ways to close the gap is creating the so-called European patients to be at the cutting-edge of clinical trials and new treatments.
= In the beginning of 2023, many European big oil and gas firms announced record profits for the previous year; the proceeds of soaring energy costs were due, mainly, to the Russian-Ukraine military conflict and the EU sanctions against Russia. This is spurring a growing clamor for the EU governments to boost taxation level on fossil fuel companies.
= Reconstruction in Ukraine: using frozen assets. The Estonian government is pressing ahead with legislation that would allow it to confiscate Russian assets frozen by sanctions and use the revenue to help in the reconstruction of Ukraine. In one of the first moves of its kind, the Estonian government wants to use €20 million worth of assets frozen in the country’s banks that could pave the way for a wider EU grab of Russian riches for the benefit of the Ukraine’s devastation. Besides, the idea attracted attention from the Baltic neighbors and allies: e.g. prime ministers of Estonia, Lithuania, Latvia and Poland call on the EU to speed up the use of frozen Russian assets to support Ukraine’s reconstruction. The intention to use frozen assets in this way was agreed previously at the EU-Ukraine summit: during the extraordinary European Council in February a draft of a political agreement was circulated intended for guidance from the Commission. The intention was evident: frozen assets must be used as soon as possible and not to wait until the war is over and a peace agreement is signed.
However, the Commission is quite cautious: while the EU institutions have been looking at legal options to more easily confiscate the frozen property of oligarchs, touching state property is fraught with legal difficulties, as well as being potentially risky for economic stability.
= European SMEs: way forward. Ever first European SMEs “road-show” started in Finland this February as a first one in a series of events in the member states to highlight the role of SMEs in getting out of the present European and global crises. The event was organised by BusinessEurope together with its member federation, the Confederation of Finnish Industries. At a panel on sustainability challenges and opportunities, BusinessEurope Entrepreneurship & SME Committee Chair Fabrice Le Saché stressed that “SMEs are currently in difficulties, companies need regulatory breathing space to survive today’s multiple crises”.
He underlined that a key issue in the European SMEs is to “avoid unnecessary disproportionate burdens to ensure an SME-proofed regulatory regime”. The event, which attracted more than 200 participants, was a unique opportunity to gather key representatives from across Europe to discuss both challenges and opportunities of SMEs scaling-up in the EU, particularly with regards to the sustainability transition.
Source: Our SME Road-show kicked off in Helsinki: are we doing enough for European SMEs?
In: BusinessEurope Headlines, 4 February 2023.
= Improving Europe’s competitiveness. According to the Commission, this issue should be at the centre of the member states’ response to numerous current crises. For example, the EU member states are best in dealing with the social consequences of the energy crisis. With already visible wage price spiral well above the inflation target there is clearly a strong chance that inflation above 2% becomes entrenched, given present wage increases being likely to be passed on into prices. In this context, responsible collective bargaining between the social partners will be crucial to avoid an increase in wages.
Thus, national governments should also use extra resources that they received through taxes on commodities and other products in the context of high inflation. This means partly to find appropriate ways to target exceptional resources to support people facing higher energy and food prices due to high inflation. But this also means making use of these resources to reduce labour taxes and/or social contributions, which has proven to be an effective way of encouraging job creation by employers. BusinessEurope Director for Social Affairs, Maxime Cerutti’s delivered these ideas at the hearing on “Social and employment consequences of the rising cost of living”, organised by the European Parliament Employment and Social Affairs Committee on the first week in February.
= Social protection: employment and productivity issues. The Commission’s take is that “Europe is one of the best places to live and work in the world”; some say, it’s greatly exaggerated… Of course, the Communities-and-present-EU-seventy years’ integration of has been quite “instrumental’ in making the European “social market economy” generally successful. However, to continue sustainable growth, the member states need better employment and productivity growth: according to the Eurostat predictions, during 2015-20 the labour marker was reduced by about 3.5 million people; besides, the European working age population is expected to shrink further on during next years and decades, with the loss of an additional 35 million persons by 2050. In this context, acknowledges the Commission, the EU-wide social protection “should better respect the states competences over social protection financing”, as increasing taxation regime “would deteriorate Europe’s competitiveness”.
Hence, one of the ways forward, in the Commission’s view, is to “focus on improving the efficiency of social investments and spending through concerted policy efforts of the EU institutions, the member states and social partners.
For example, looking at some positive effects of a European network of public employment services created some years ago, BusinessEurope recommends the creation of a European network of national social security institutions to provide a EU-wide forum for regular cooperation among the member states governance bodies and national social partners. The suggestion could be a positive step towards future of the welfare state and social protection in Europe.
Reference to: https://www.businesseurope.eu/publications/businesseurope-headlines-no-2023-04/#SME
= Clean technology development. The discussion on competitiveness in the EU (at the extraordinary Council meeting on 9 February 2023) has been rooted in an EU-wide consensus: i.e. to reach climate neutrality by 2050 and active development of clean-technology industries in the member states to assist climate challenge. Besides, the EU institutions have to see that fair competition prevails on the global stage, the issue closely connected to green and clean technologies.
The EU states have been already developing clean-tech sector’s industry during last years to make it innovative and competitive world-wide: e.g. through the EU’s roadmap to 2050 called “Fit-for-55, with the financial policy support in the NextGenerationEU program.
As to the competition issues, the EU “rule-block” includes: analysis of cartels, abuse of dominance and vertical restraints; economic analysis in the CJEU case law; digital markets and the impact of the Digital Markets Act (DMA); economic context of the new vertical “block exemption” regulation and “vertical guidelines”; and economics of sustainability agreements.
This developmental direction is behind the EU’s reaction to the US Inflation Reduction Act, IRA; the main “working instrument” is the EU’s “green deal industrial plan”. It consists of the following main components: a) regulatory environment to provide incentives for clean-tech investments, b) necessary EU-wide funding through a targeted and temporary flexible state aid, and attracting private capital, c) preparing adequate workforce and skills, and d) an active trade policy to strengthen supply chains.
= As to the workforce and skills’ issues, see more on new trends in training and education in: Quality education is a key to addressing global challenges. By Eugene Eteris and Ojars Sparitis, February 2023. – University World News, in: https://www.universityworldnews.com/post.php?story=20230203095914813.
Besides, a new book by Eteris E. and Sparitis O. Modern Educational Revolution: Challenges and Solutions. – LAP, 2022.-144 pp. In: https://morebooks.shop/shop-ui/shop/product/9786205517871. Book’s version in seven languages in: https://www.morebooks.shop/shop-ui/shop/translation-bundle/8b5689a6540
And this also requires a well-functioning European capital market. And likewise, the speed to train new qualified workers is as important as the speed to issue permits. And access to the necessary critical raw materials is as crucial as access to finance. So the overall picture has been discussed at this Council. The Commission will now table the concrete legal proposals mid-March, in time before the European Council of next March.
Source: https://ec.europa.eu/commission/presscorner/detail/da/statement_23_761, 10 February 2023.