Businesses urge EU to become more like the US

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Inspired by the Draghi report, Europe’s three largest business federations have called for Europe to “catch up” with the US in several ways—an approach that may prove more difficult than it sounds.

Germany’s BDI, France’s Medef and Italy’s Confindustria met in Paris on Thursday and Friday (21-22 November), where they adopted a joint statement calling for Europe to catch up with the US economy.

“It is always good practice to compare yourself with others,” Medef’s president Patrick Martin told journalists on Friday.

Inspired by Mario Draghi’s report on European competitiveness, the three associations noted that Europe has lower growth rates, less innovation, higher energy prices, fewer scale-ups, more than double the number of new laws since 2014, and less spending on research and development (R&D) – all compared to the United States.

The three groups are therefore calling for a catch-up test: Within a year, the key policy results of the EU should be compared with those of the US, with policies adjusted “as necessary”.

In some policy areas, however, the groups already know what is required, urging the new Commission and governments to “adopt a technology-neutral approach across all initiatives, review all relevant regulations, raising R&D budgets to 3% of GDP, and start to unlock €800 billion—all within one year.”

The latter is to be achieved primarily by—you guessed it—integrating capital markets. "We should implement a real capital markets union (CMU) in the next year," said Martin at the conference.

Donald Trump will probably implement “broad and aggressive” measures targeting the European Union’s trade surplus with Washington during his second term in the White House, according to a former senior US trade official. Greta Peisch, former General Counsel of the Office of the United States Trade Representative (USTR), told Euractiv that Trump's policies will probably be of a similar “level of ambition” to the 60% tariffs on Chinese goods and 10-20% duties on all other US imports proposed during his re-election campaign. “I think Trump is going to take broad and aggressive action on trade,” she said. Peisch, who stepped down from her position at the USTR in January and currently works for Wiley, a DC-based law firm, said that one of the incoming Trump administration's main priorities will be to address Washington's considerable trade deficit with the rest of the world – including the EU. “We are importing autos from the EU. We are not exporting any. We are importing steel from the EU. We are not exporting any [...] There is a perception that there is something unfair about this trade relationship that should be corrected,” she said. Read more.

The integration of Europe’s capital markets has largely failed to advance and may even be in “regression”, says a top European Commission official. “Integration... actually is maybe even a bit on the back burner [or] in regression,” said Jan Ceyssens, head of the capital markets unit at the European Commission's Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA). Ceyssens was speaking on Tuesday (19 November) at an event in Brussels marking the release of the Association for Financial Markets in Europe's (AFME) annual report on the EU's Capital Markets Union (CMU). The report states that "widening" fragmentation is posing critical risks to the EU's financial stability, is an accurate, if largely negative, depiction of the current backdrop for capital," Ceyssens said. AFME and the Commission's warnings come amid growing efforts by EU officials to boost Europe's capital markets contribution to the EU's massive investment needs—which some estimate to be the region of €800 billion per year. Read more.

Germany’s focus on reducing building energy consumption has failed, representatives of corporate and public landlords said at an event in Berlin on Tuesday (19 November) as ministers turn against each other in the upcoming election campaign. “Climate protection in existing buildings, as we are currently doing it, is a ‘mission impossible’,” Axel Gedaschko, president of the German Association of Housing and Property Companies (GdW), said at an industry event on Tuesday, which he said was due to “a dogmatic, almost creed-like focus on absolute energy savings in individual buildings" slowing down decarbonisation and increasing costs. Social Democratic construction and housing minister Klara Geywitz, a close ally of incumbent chancellor Olaf Scholz, blamed the Economy Ministry led by Scholz-contender Robert Habeck (Greens). During her term in office, "the fundamental conflict was between the economy ministry's focus on energy efficiency and the affordability of construction," she said. Read more.

The majority of EU member states have missed a deadline to enact a directive aimed at boosting the minimum wages of citizens—with some actively pursuing a watering down of national standards, Europe’s largest trade union organisation says. The European Trade Union Confederation (ETUC) said in a report published on Monday (18 November) that a “lack of political will” has led many countries, including France, Poland, and the Netherlands, to miss last Friday’s (15 November) deadline for transposing the EU minimum wage directive into national law. Only eight member states had officially ratified the directive as of last week: Belgium, Czechia, Denmark, Germany, Hungary, Lithuania, Romania, and Sweden, the report said. Conversely, others—including Latvia, Luxembourg, and Czechia—have actively engaged in efforts to lower workers’ salaries or their ability to negotiate collective agreements, it said. “National governments need to work with trade unions to fully deliver on the promises of the directive,” said ETUC Confederal Secretary Tea Jarc. “If they continue failing to do so, the Commission should enforce it.” Read more.