Mr Persson, you have taken up your new function as President of BusinessEurope on 1 July 2022. You have a remarkable career and FEDIL is delighted to be working with you and we wish you all the best. What is your vision and what are your priorities for BusinessEurope and its members?
The President of BusinessEurope is the voice of the European business community. There will be continuity in our positions, which are the result of a coordination process with our member federations from across the continent.
But of course, every President brings his own style, his own experiences and points of views. These can reflect from which part of Europe they come and which sectors he or she has worked in. This is why BusinessEurope’s members are keen to have a certain rotation among larger and smaller countries as well as different entrepreneurship experiences when electing the President.
As a Swede I come from a medium-sized country in the North of Europe. I am a strong believer in the crucial necessity of a functioning single market (which is our common home market) and in the necessity for our economy to be open to the world. I will base my statements and actions on the compromises we will define with our constituency. However, these convictions will of course also remain a compass because, every President of BusinessEurope has two key tasks: to be the herald of a strong and competitive European economy and to make sure that the business community speaks with one voice to achieve this goal. Business is part of the solution to many of the challenges facing Europe, and speaking with one voice in the dialogue with policy-makers helps to ensure that the policies that are put in place allow companies to play their role in society.
During our last Council of Presidents, we defined our priorities for the Czech Presidency of the European Union. The Czech Presidency has a crucial role to play in putting Europe back on the path to security, stability and prosperity. Our immediate concern is of course the very challenging energy situation we are facing at the moment. We urge the Czech Presidency to find rapid agreement in the Council on efficient EU emergency measures for companies and households. In addition, we count on the Czech Presidency of the European Union to inject stronger ambition in Single Market policy and in EU trade policy. These two policy areas were less at the centre of the attention in the last months and they are crucial for our economic resilience, especially to better weather crises such as the current one. We also count on the Czech Presidency to defend better regulation principles and steer the different legislative proposals it will deal with towards workable requirements for companies, from corporate governance and due diligence rules to Fit-for-55 proposals and social policy legislation. We support the objectives pursued in the areas I just mentioned. But we have concerns regarding some provisions which do not take into account the current crisis situation.
We are experiencing unprecedented times. The Covid pandemic and the war in Ukraine, the inflation, the energy crisis, and disruption in global supply chains are posing harsh challenges to European businesses. In the current scenario, additional burdensome obligations on companies clearly do not help. Nevertheless, the EU has moved forward with its initiatives on corporate sustainability due diligence, on corporate sustainability reporting and on sustainable finance taxonomy. Do you believe that these legislative initiatives and their envisaged impact on companies fit in our times of crisis?
We share the sustainability objectives pursued by the corporate sustainability reporting directive (CSRD) but do not believe that over-prescriptive reporting obligations will advance that cause. Companies want to focus on addressing real sustainability issues encountered on the ground, not on writing reports. Excessive reporting obligations discourage investment, including investment to reach sustainability objectives. Enterprises need a strong alignment of sustainability standards globally to avoid a fragmentation of reporting requirements around the world.
Implementation of the CSRD requires to prepare sustainability reporting standards. These standards must aim at helping companies to provide information that is proportionate, understandable, verifiable and comparable. The EU must avoid further gold plating of sustainability reporting rules, on top of the CSRD, the sustainable finance taxonomy and the proposed directive on corporate sustainability due diligence (CSDD) when developing sustainability reporting standards with the help of the European Financial Reporting Advisory Group (EFRAG).
BusinessEurope is in favour of reasonable European rules on sustainable corporate governance and due diligence. Having a European due diligence framework is a good idea. However, more work is needed on the Commission’s proposal to end up with a clear, proportionate and workable framework. Truly harmonised rules on due diligence have the potential to help tackle the environmental and human rights violations. However, unrelated concepts such as corporate governance do not belong in the current proposal on due diligence. Moreover, these rules should not shift on companies’ shoulders the responsibilities of states. Yes, companies want to be part of the solution to make supply chains more sustainable, but states also need to fulfil their duty to protect human rights and the environment according to UN and OECD long-standing principles. BusinessEurope stands ready to work with co-legislators to make this initiative work, not only for people and society, but also for business which are the engine of our prosperity.
The EU has been tabling a set of legislative instruments on energy and environmental matters. As much as they have laudable objectives, they do pose expensive and difficult challenges to companies, first among everything the “Fit for 55” package. On the other hand, the EU intends to face the current energy crisis through instruments such as the “REPowerEU” and the “Temporary Crisis Framework”. What is your view on these instruments, and notably on the balance between obligations on companies and supporting measures?
BusinessEurope has always stressed that we stand behind the EU’s long-term climate objectives, especially the goal of carbon neutrality. And business is acting. Emissions in the industrial sectors have reduced by 35% since 1990. It is also clear that in the long term, a full switch to decarbonised sources of energy is the answer, not only to reach the EU’s climate targets, but also to lessen dependence on foreign suppliers.
We support the ambition of the RePowerEU plan, but we need to be realistic about how fast this can happen. For example, our regasification capacity at LNG terminals is limited and cannot be increased by miracle. And it can take up to 10 years to build a wind farm in Europe. Reducing this dependence is a long-term task. What is key for this winter is to explore all options to ensure the continuation of business activity in Europe.
The current energy crisis is hitting Europe harder than other world regions. Gas prices on the spot market in Europe are 10 times what they are in the USA, for example. Tackling skyrocketing energy prices and finding ways to mitigate them is an urgent matter of survival for European industries. Policymakers must be careful not to further deteriorate this situation by rushing through half-baked climate measures. For example, a Carbon Border Adjustment Mechanism (CBAM) without a reliable solution to address export competitiveness will further intensify Europe’s deindustrialisation and increase global emissions.
Yes, in the long run, measures of the “Fit for 55” package, e.g. on renewables and energy efficiency can make an essential contribution to reducing our dependency on Russian gas. However, we must avoid a scenario where the additional regulatory and financial burden brought about by the package delivers another critical blow to struggling companies. What we need is decarbonisation, not deindustrialisation.
Seeing the fragilities of global supply chains, we support a resilient and strong model for an open strategic autonomy as well as new opportunities for reshoring industrial activity to the EU. Do you think that they are desirable, and do you see the current EU setup as capable of achieving these goals, especially if we take into account the regulatory straitjacket built up over decades?
In the current unstable environment, companies might decide to produce closer to home or to separate business operations when it comes to markets that present more risks, for instance due to their political instability or autocratic system. This is a company decision. What we ask from politicians is to have a legal framework in Europe that supports competitiveness. This includes a trade policy that opens new trade and investment opportunities for European companies through bilateral trade agreements. With raising costs of energy and raw materials in Europe, our companies need to be able to access more suppliers at more competitive prices. Exporting to faster growing regions in Asia or Latin America helps companies to invest and create jobs in Europe.
Europe cannot be self-sufficient, but we should mitigate our exposure to certain partners that can be considered as less reliable for political or economic reasons. We believe in improving our resilience through diversification, looking to other alternative markets for instance in Latin America (Chile, Mexico, Mercosur), in Africa or in Southeast Asia (e.g. India, Indonesia). These countries present opportunities for diversification and for closer economic and political ties. Europe has an interest in being more present in these regions because they are growing fast and because we want to promote our democratic model of economic development and social wellbeing, which is more sustainable, inclusive and mutually beneficial compared to others.
We are not convinced that “‘friend-shoring’ is the answer. We cannot trade only with like-minded countries because this will lead to further political and economic divergence that ultimately can increase the risk of conflicts. We should not alienate those that might think differently. We need to engage with them. However, in some very specific areas related to critical technologies (in goods that can be used for civilian and military purposes) we might need to be more careful and coordinate more closely with like-minded partners.
We believe that technology and innovation can accompany business in facing the challenges of these times. We wonder whether enough is done at EU level, also considering the shortage of labour force and skilled workers which is impacting business across the EU. How do you see the EU should improve its policies on technology and innovation to have a better impact on EU companies, including the need to address the shortages issues?
Growing labour and skills shortages is a key and immediate challenge, which goes beyond the issue of technology and innovation. Companies from various sectors are faced with labour shortages and at different skills levels. Having said this, we have shortages in digital skills and this is a key bottleneck for digitalisation and growth for many companies. Recruitment difficulties for ICT professionals were already significant before the Covid crisis. According to a Eurostat survey conducted in 2021, 55% of companies experienced difficulties in recruiting ICT specialists in 2019. The difficulty to recruit ICT specialists is getting worse, as labour shortages have become even more acute during the recovery.
BusinessEurope has asked the European Commission to come up with an action plan to support Member States in tackling labour force and skills shortages in its 2023 work programme. This initiative needs to materialise and take into account the rapidly changing economic and labour market contexts. We welcome the Commission’s proposal to work towards two Council recommendations on digital skills and education in 2023. The aims of these future recommendations should be to reduce the digital skills gap, support innovation, increase the pool of digitally competent teachers and trainers, enhance digital learning infrastructure, and improve cooperation between education and training institutions and employers.
Active labour market policies also have a key role to play. We need innovative methods of reaching out to inactive people, better childcare or long-term care services and improved skills intelligence at EU, national and local level. The EU and Member States should work towards developing in-work benefits to increase employment participation, improving mobility in the EU as well as economic migration of the third country nationals to fill unfilled vacancies across Europe.
Making good use of governments’ resources and funds is particularly important in a context of high inflation. Exceptional measures to support companies and households facing higher energy and food prices must be well targeted. And in a context of higher interest rates, credible strategies to put public finances on a sustainable path is crucial.
Finally, economic migration has a role to play to have well-functioning labour markets in Europe. The changing labour market context and rising recruitment difficulties in Europe call for a fresh EU approach to economic migration.