As Europe measures its strength in an increasingly tough global competition, and Romania seeks to consolidate its role as a strategic player in European policy-making, Markus Beyrer, Director General of BusinessEurope, says that “cannot afford to focus on just one area of priority” if the EU is to prosper on an equal footing with the US and China in terms of competitiveness.
In an interview with CaleaEuropeană.ro, Beyrer emphasizes that the European business community is ready to contribute directly to shaping decisions, but this requires a real partnership with policymakers.
“We always take a constructive approach, in which we not only identify challenges, but also offer concrete solutions,” he says.
Speaking about the EU’s competitiveness deficit vis-à-vis the US and China, he warns that current promises “are not enough,” given that regulatory costs for companies remain huge and investments are migrating to more dynamic markets. “In terms of the Single Market, that data clearly demonstrates the urgent need for it to be strengthened”, he adds.
At the same time, Beyrer welcomes the increasingly visible involvement of Romania and the countries of Central and Eastern Europe, where “viewpoints must always be heard and appreciated,” insisting that without coordinated action on investment, energy, the internal market, and reducing bureaucracy, Europe risks losing the “economic race,” as European leaders are increasingly recognizing.
CaleaEuropeană.ro: The “Smart Development, European Competitiveness” Summit, organised by the Concordia Employers’ Confederation, emphasised the partnership between the state and the private sector, including in the development of public policies. How does this dialogue function at the European level, and what best practices could Romania adopt so that the business community contributes more directly to shaping economic strategies?
Markus Beyrer: BusinessEurope engages at every level of the EU institutions to ensure that our message is heard, from technical discussions and providing input to consultations to participating in high-level formats such as the Tripartite Social Summit alongside the Commission and Council Presidents.
When we have these engagements, we always take a constructive approach whereby we not only raise challenges but also offer policy advice and concrete solutions. We also provide practical examples and scientific evidence (e.g. our study on energy costs) and make concrete proposals for improvements (e.g. our 68 proposals for simplification and burden reduction).
Moreover, trust and accountability are important. If policymakers receive a position from us hundreds of experts from all over Europe have been involved and contributed to it. So, policymakers can count on the fact that it is balanced and reflects the business community at large.
These are principles that are relevant not just at the EU level, but also for Member States like Romania.
CaleaEuropeană.ro: Concordia President Dan Șucu underlined that Romania must move “from an economic executor to a strategic leader” and take an active role in defining European policies. How can BusinessEurope support this transition, so that Central and Eastern European countries become more visible and influential in the debates on the Union’s competitiveness?
Markus Beyrer: For us, it is all about compromise. We focus on the bigger picture and develop positions that are cross sectorial and benefit Europe and business at large.
This is what makes our positions carry such weight: If we say that a position is a BusinessEurope position – it means that all of our members are on board and experts from various different sectors, regions and sizes have contributed to it.
We work closely with members such as Concordia to ensure that Central and Eastern European viewpoints are always heard and valued in this process.
CaleaEuropeană.ro: During the same event, Romanian President Nicușor Dan echoed the concerns of several European leaders who believe that Europe risks losing the “economic race” with the United States and China unless it accelerates reforms and simplification. Do you agree that the current decision-making pace within the European Union is too slow to withstand global competition?
Markus Beyrer: To safeguard the EU’s competitiveness and enable it to thrive on equal footing with the U.S. and China, the Commission must deliver on its promise to cut regulatory burdens on companies by 25% and by 35% for SMEs
In the last policy cycle, the way to go was to regulate without keeping in mind the effects it has on companies and competitiveness. We therefore welcome the fact that European institutions have started to recognise the extent of our competitiveness challenges. It is a result of us ringing the alarm bells for years and calling for a reboot in EU policy. An indication of this shift are the Omnibuses. These proposals should simplify current regulatory proposals. However, promises and a few Omnibuses are not enough. The Commission’s current omnibuses aim to cut €8 billion in compliance costs – this is only 5% of the total annual cost of €150 billion for businesses (Eurostat). We must continue with long-term burden reduction efforts.
While the direction of travel is right, we now need to see concrete results for the companies on the ground. Additionally, we need at least two more years of fully fledge Omnibuses to come anywhere near of the burden reduction promised by the President of the European Commission.
While the speed of delivery is important, as companies need to finally feel some of this burden reduction, for us it is most important that we are finally moving in the right direction where policy makers understand more and more the challenges businesses face. Now it is important to ensure, that all policy makers throughout the legislative cycle – Commission, Council, European Parliament – understand this urgency and act with unity.
CaleaEuropeană.ro: BusinessEurope called for a European industrial competitiveness strategy long before EU leaders began to focus on this topic. Where should Europe intervene as a priority: in investment, in strengthening the Single Market, or in cutting bureaucracy and simplifying regulation?
Markus Beyrer: The European economy is at a point right now where we quite frankly cannot afford to focus on just one area of priority. The need for enhancing our global advantage and ensuring competitiveness is so urgent, that we cannot afford to only turn one screw at a time right now. The truth is that the EU can and must make all of these matters a priority. Given the competitiveness gap with the U.S. and China, the EU must focus on the needs of businesses when legislating to attract investments and make sure that innovation happens in Europe. Over 80% of venture capital from EU investors flows to U.S. start-ups. We believe in Europe’s inventions, but they don’t believe Europe is the best place to scale them.
In terms of the Single Market, that data clearly demonstrates the urgent need for it to be strengthened. The IMF estimates that intra-EU barriers are equivalent to 110% tariff in services and 45% in goods. Intra-EU trade has stagnated at around 20% of EU GDP since 2007 vs. more than 70% of GDP for intra-U.S. trade.
And we have already discussed the crucial need to rapidly reduce the regulatory burden on businesses across the EU. Moreover, the EU must prioritise lowering energy prices: EU companies continue to face electricity prices that are 2-3 times higher than in the U.S., and natural gas prices that are 4-5 times higher.
On the reduction of energy costs, the Clean Industrial Deal falls short – especially in the short term. At the same time, most short-term measures (e.g. lower energy taxes, grid charges) are primarily in the hands of member states. In the longer-term, the further integration of European energy markets by developing, modernising and building more interconnectors and shared energy infrastructure will be key.
With the current situation, we need determined and swift action in all these areas.
CaleaEuropeană.ro: From a business perspective, there seems to be a growing need to reconcile climate ambitions with industrial competitiveness. How do you assess the current balance between environmental, social, and competitiveness objectives? Is it time for a “strategic reset” of Europe’s economic policies?
Markus Beyrer: While European businesses remain fully committed to climate neutrality by 2050, targets alone will not deliver the needed results. There must be incentives and a business case to invest in decarbonisation. The debate on the 2040 target must therefore focus on the key enabling conditions that will create this business case and make the EU’s climate ambition achievable.
Securing access to affordable energy, mobilising massive public investments, building the necessary infrastructures, and creating lead markets will be key. We also need a stable and technology-neutral regulatory environment that avoids overregulation and fosters innovation.
Moreover, European industry needs strong protection against carbon leakage until there is a level playing field. If CBAM proves not to be effective, the phase-out of ETS free allowances should be postponed until other appropriate instruments are found. Flexibility mechanisms, including high-quality international credits and certified removals, can also play a role in reducing costs and recognising sectoral differences.
CaleaEuropeană.ro: The Capital Markets Union has long been a recurring yet unfulfilled topic at European summits. Europe has capital but struggles to mobilise it efficiently. What needs to change in order to better stimulate private investment in innovation and technology?
Markus Beyrer: BusinessEurope urges the EU and the Member States to facilitate both private and public investments at an unprecedented level to regain the EU’s lost competitive edge and to finance the green and digital transitions. Finance needs to be available through a variety of channels and on reasonable terms. We need to facilitate the free flow of capital in the EU and to promote cross-border investment. Developing a Savings and Investments Union (SIU), which combines the Capital Markets Union (CMU) and the Banking Union, should help to increase the availability of finance but the main goal should be to make the EU more attractive to both foreign and domestic investors.
