“None of those goals will be achievable if we don't get back into a growth mode in Europe,” says Business Europe President, Fredrik Persson
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00:00 Business is currently moving faster than ever.
00:03 Today is the slowest day.
00:05 It will never get slower than it is today.
00:07 Hello, I'm Angela Barnes and thank you for watching The Big Question,
00:17 our new business series from Euronews where we sit down with industry leaders and experts
00:23 to discuss some of the most important topics on today's agenda.
00:28 And today I'm joined by Frederik Pearsson, the President of Business Europe,
00:34 and he is a leading advocate for growth and competitiveness in Europe.
00:39 Frederik, great to have you on the show. Thank you very much for joining us.
00:43 Thank you, Angela, for having me. It's a great opportunity.
00:46 Business Europe, we know, is known for standing up for companies
00:50 across the continent and campaigning on the issues that most influence their performance.
00:55 So first of all, tell us about the work of Business Europe
01:00 and what those key issues are at the moment.
01:03 We represent member federations from 36 European countries.
01:08 So it's not only the EU 27, it's broader.
01:12 So we are on the ground 24/7 in Europe and representing close to 20 million companies.
01:24 So I can hand on heart really say we're the voice of European business
01:30 and representing those 20 million companies.
01:32 We're also the voice of the Europeans.
01:34 So I do not see the separation between companies, employees.
01:39 I mean, it is a network and that's why I'm so passionate about this
01:44 and trying to make Europe the place to be, to invest,
01:48 and protect the European way of life, which is great.
01:52 I can see your passion, Frederik.
01:54 When you're speaking to that huge network,
01:56 what among them is the sort of the key issues that are coming up a lot at the moment?
02:03 What's their sort of major concerns at the moment?
02:05 This is a big election year.
02:07 Firstly, I think it's a surprisingly united view,
02:11 regardless if you're an SME, small company in Finland,
02:15 a multinational global company out of France, a local company in Italy.
02:23 The key concern is that Europe is falling behind in terms of competitiveness.
02:29 Our competitors in Asia and in the US are performing better.
02:35 If we just look at the numbers and the growth in Europe, it is falling behind.
02:41 This has nothing to do with the pandemic or the Russian war in Ukraine.
02:46 That has increased the pace, but already ahead of the pandemic,
02:52 Europe was unfortunately falling behind.
02:54 The key thing that's going to happen here is we're setting a lot of ambitious
03:00 goals within the EU on the green transition, on the digital transition,
03:05 and now also on the geopolitical transition.
03:08 None of those goals will be achievable if we don't get back into a growth mode in Europe.
03:16 But we're really calling the alarm bells, saying to the politicians,
03:20 "Hey, we seriously have a problem here and now."
03:23 Fredrik, if it wasn't the pandemic and it wasn't the Russia-Ukraine crisis,
03:34 as you stated there, why has Europe fallen so far behind its competitors?
03:40 When asking our members today, they call out three key topics that is hampering competitiveness.
03:50 And creating the lack of growth.
03:52 The first one is the cost of energy.
03:54 That for sure is related to first the pandemic, but foremost, the war in Ukraine,
04:01 which has put Europe at a disadvantage.
04:04 A year ago, we had even higher prices and they have now come down.
04:09 But even at the current level, post-pandemic prices are twice in Europe, as we saw before.
04:17 If you go to the US, they're up about 30%.
04:20 So we're losing out against our US competitors and our Asian competitors.
04:25 The second one that's being called out, and that was even there before the pandemic,
04:30 that is the regulation.
04:32 We're so keen in Europe to regulate things.
04:37 As an example, in the last five years, we have had close to 100 new laws being passed on European
04:45 level, and that is adding 5,000 pages of new regulatory text to the companies.
04:52 It basically means that currently you're getting a new regulation every second day.
04:57 For a big company, this is a hassle.
05:01 But they have the structure, they have departments to handle it.
05:06 They lose out on competitiveness.
05:07 But if you're an SME, 99% of those 20 million companies are SMEs.
05:12 What happens with them?
05:14 They either go out of business, they decide not to enter a new market,
05:17 and they are the backbone of the large caps.
05:22 Of course, if we don't have the SMEs, the large caps will falter as well.
05:26 And we need to stop this.
05:30 It's good that we have regulation, but we need less regulation and better regulation.
05:35 And that was a challenge way before the pandemic, way before the Russian war in Ukraine.
05:42 And the third is combination, I would say, of talking about resilience and openness.
05:48 I think we learned a lesson from the pandemic that supply chains were maybe pushed to the limit.
05:53 And of course, with the Russian war in Ukraine, that has been challenged again.
05:58 We need to cherish the single market we have.
06:03 That is a gem for the EU.
06:05 You don't find that anywhere else.
06:07 It's the biggest market you have.
06:10 But to the point we discussed a bit before here,
06:12 there are still challenges within the single market.
06:15 It's 30 years old.
06:16 It's a vibrant and strong 30-year-old.
06:19 But we need to push down those hindrances that are still out there.
06:23 And that comes to services.
06:24 It comes to data, because the market has changed a lot in 30 years.
06:27 30 years ago, we didn't even have the smartphones.
06:30 So that needs to be strengthened.
06:32 And lastly, the openness of trade.
06:35 Really getting the best out of the gem of the EU, the single market,
06:40 and opening up for the possibility to source from other countries.
06:46 If we do that, I'm positive.
06:48 Then Europe will get back in the number one position.
06:52 If we don't, it's a bleak outlook, honestly.
06:56 And I'm not being alarmistic.
06:58 I'm just calling it the way we see it.
07:00 [MUSIC]
07:06 I read on your website that if all barriers to the free movement of goods and services
07:11 were abolished, the single market could unleash €730 billion by the end of 2029.
07:17 That's just...
07:18 It's one of those humongous numbers.
07:20 When I first heard it, I said, "Have we done the calculus wrong?"
07:24 It's incredible.
07:25 And in your view, Frederik, are there any countries on the continent
07:29 that are making it easier to do business, that are leading by example?
07:33 I wouldn't say that it's specifically a particular country doing it.
07:40 I mean, we find sort of positive pockets across the boards.
07:45 We did a study on permitting.
07:48 And I was like, "Permitting, again?
07:51 Isn't that extremely boring?"
07:53 No, but it doesn't come with a cost.
07:55 Actually, it's less expensive to have a faster permitting process than a slower one.
08:01 And honestly, it's not only about the EU.
08:03 There's a lot of EU bashing and saying it's all about the Commission or the Commission
08:08 president.
08:08 But there are challenges also on the national level.
08:12 There we saw some really good examples in Greece, where they had, on a national level,
08:18 come up with a sort of faster permitting procedure.
08:20 So if we can build both on a political level and on a business industry level on the good
08:26 examples across Europe, I think we'll be a tough match for all our competitors, for sure.
08:37 Frederik, that's really interesting.
08:38 And you've mentioned a couple of pocket of those examples there.
08:42 Where is Europe leading the way?
08:45 Is there any sector where you feel that Europe is leading the way?
08:48 The way I look at that to get the answer of that question, I like to go to the US.
08:54 What are they doing?
08:55 Because to your point, if you look back over the last 15 years, one reason behind the sort
09:00 of stellar growth in the US versus Europe is, of course, the way they move within tech.
09:05 So where do they see that they have the weakness?
09:09 I mean, when you look at the IRA, there's been a lot of upset on EV vehicles.
09:14 But we have to step back and say, why does US politicians think it's worth it to do the IRA move?
09:20 So obviously, they've made the comparative study and said,
09:24 we're falling behind on green technology.
09:27 We're falling behind Europe.
09:30 We really need to step up our game on green technologies when it comes to batteries,
09:35 wind farms, et cetera.
09:38 So for me, that is really the sign, OK, this is where we're doing well.
09:44 I would also call out sort of maybe the sort of the boring parts of the industry
09:50 backbone when it comes to the way sort of industry 4.0, as it's called.
09:54 How do you sort of put up the factory of the future?
09:58 We have a huge skill set of that in Germany, in Czech Republic, Northern Italy, et cetera.
10:05 We're really strong on that.
10:06 I mean, if you build the factory of the future anywhere in the world, be it in China, US,
10:13 trust me, there will be Northern Italian engineers setting up that factory.
10:17 So they were really, really strong.
10:20 And this is the market of the future.
10:24 So I see the Inflation Reduction Act and what the Americans are trying to do to
10:28 reindustrialize the US, given the success that we had within technology.
10:32 That is the best acid test of where is Europe performing really well.
10:37 And what about the worst for Europe?
10:41 Are we up to date with the AI innovation?
10:44 No, I think that that will be a challenge.
10:46 I would even take a step further back and look at what is being invested in innovation and R&D,
10:55 going all the way back to our educational systems, the universities, how we're educating our young
11:03 within sort of maths and sort of standard things to know, getting more engineers.
11:12 Because if you look now, Europe invests roughly 2% plus in this, or it's 2.3.
11:20 The Chinese have just passed us at 2.4.
11:24 And of course, they're a huge economy.
11:26 The US is above 3%.
11:27 And this is like investing in your pension or saving for your house.
11:33 If we don't do the forward-looking investments, we save money today.
11:40 But we're going to look really bad in five to 10 years.
11:44 So there, I think we have a joint responsibility from the political side,
11:48 but also from business and industry.
11:50 We need to invest and dare to invest in the future.
11:54 And how do you get companies to invest?
11:56 Better and less regulation, faster permitting times, the predictability.
12:04 Because companies do want to invest in Europe.
12:08 Just don't make it a hassle to invest in Europe.
12:13 Make it easy.
12:14 And what about the tax incentives, Frederik, as well?
12:23 And harmonizing that.
12:25 That's a huge challenge, isn't it?
12:26 It is.
12:28 And a year ago or two years ago, there was all this discussion about,
12:31 "Oh, business, they only want new investment funds and we need to match the IRA."
12:36 I don't think you heard me a single time during this discussion
12:41 bring that up as a key topic.
12:44 Honestly, if we could just get the affordable energy,
12:50 the better regulation, the faster permitting,
12:54 tear down the existing walls within the single market,
12:56 save your money.
12:59 There will be points where that is important,
13:02 where you get a short-term market shock,
13:04 where I think you need to step in,
13:06 where there are new emerging technologies that need a push from governments
13:10 to get into the water, so to speak.
13:13 But this is not about the money.
13:15 This is about the competitiveness.
13:19 You can never subsidize a company or a region or a country into competitiveness.
13:25 I mean, that's sort of the flip side of competitiveness.
13:28 Business want to do it on their own.
13:31 And if we don't do it well, then we shouldn't be in business.
13:35 That's the way it should work.
13:39 So more related to tearing down obstacles in the single market.
13:44 But this is not about subsidizing our way to success.
13:49 I would venture to say if we don't get the growth,
13:52 how should we then be able to keep up the welfare systems we have in Europe,
13:58 the way of life we have, the free education we have?
14:00 The only other option is, of course,
14:02 then we need to borrow from the generations to come.
14:06 And I think that would be totally unacceptable.
14:10 Who are we to leverage generations to come?
14:15 Fredrik, on that very strong note,
14:18 I'm going to end the show there because we've got a lot of food for thought.
14:23 Thank you.
14:24 And as I always say, we are what we're called.
14:25 We're Business Europe.
14:26 That's what we work for and that's what we love.
14:28 Well, Fredrik, thank you very much.
14:30 And thank you very much comes across.
14:32 And thank you all for watching this episode of The Big Question.
14:36 And you can catch all our shows on the Euronews YouTube channel.
14:40 And you can also head across to the Euronews.com website,
14:44 hit the business page section and all of our Big Question episodes are also there.
14:50 Thank you very much for watching.
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