Business Location Europe

Making Europe fit for the future

Turbulence on financial markets, excessive borrowing by important EU Member States and Euro countries have made it urgently clear that Europe as a location for business faces great challenges. Despite first visible successes in crisis management, overcoming the persistent economic and sovereign debt crisis continues to be the all-surpassing challenge at national and European level alike. To emerge strengthened from the crisis and secure its role in world politics, the EU needs a new stability culture with more shared budget discipline, closer economic policy coordination and consistent implementation of the EU 2020 strategy targeting growth and jobs.
With the strengthening of economic policy coordination and monitoring of fiscal policy, EU Member States have completed the change of direction towards a European stability culture and set the course for a “genuine” economic and monetary union. BDA has spoken in favour of automatic sanctions for failing to meet the requirements of the stability pact and therefore welcomes the tightening of the stability pact. BDA also welcomes the reformed European Semester which supplements the EU 2020 strategy by opening up European coordination in important policy fields within the ambit of national legislation. The strengthening of economic governance in the EU / EMU must now be credibly implemented by ensuring effective monitoring of the reform progress in view. Promises by Member States regarding the objectives to be met should be more binding but the concrete modalities for realising the promised objectives should remain a national preserve, in line with the principle of subsidiarity.

Stronger political integration is indispensable for the future viability of the European Union and of the currency union. In August 2011 BDA President Dr Dieter Hundt presented his five-point plan for Maastricht II in which all sections of society are invited to reflect on the principles underlying the European idea and to campaign offensively for European unity and further development of integration:

    1. Monetary union needs a political union
    2. Europe needs binding requirements for economic and financial policy
    3. Europe needs Maastricht II
    4. Europe needs Member States that are fit for the future
    5. Europe is our future
Europe 2020 strategy: focus on growth and jobs

In the framework of the Europe 2020 strategy, the European Commission has to evaluate Member States’ reform strategies much more critically and expose deficits in reform efforts unsparingly. This did not happen enough in the past. Only if the Europe 2020 strategy is consistently pursued and implemented effectively will it help to ensure that each Member State aligns itself on the best. This in turn will help to ensure that the EU as a whole becomes more competitive.

BDA expressly welcomes the Europe 2020 strategy’s job objective – an employment rate of 75%. But success will only be achieved if the flexicurity principles adopted by the European Council are much better applied than hitherto. Without resolute measures for an employment-friendly structuring of labour market orders, the EU will not manage to reach this ambitious goal. By contrast, if EU Member States are truly serious about the 75% employment rate, this will also bring about decisive progress in the struggle against poverty. Because the best remedy for poverty is work.

Further development of the single market: priority for competitiveness, growth and jobs in the EU

To give new impetus to development of the single market, in April 2011 the European Commission presented the communication “Single Market Act: twelve levers to boost growth and strengthen confidence”. The measures it proposes were to be adopted by the European Parliament and the Council the end of 2012 – to coincide with twenty years of the single market’s existence.

It is essentially welcome that in its efforts to breathe new life into the single market the European Commission wants to place particular emphasis on measures which generate growth, create jobs and deliver tangible results for citizens and companies. However, the concrete measures proposed by the European Commission in the Single Market Act are sometimes counterproductive and even dangerous. By way of example, the proposals in the field of pensions run the risk of impeding the single market and hence constitute an obstacle to the stated goal of more growth and jobs.