Time for a growth strategy for European business

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On 30 November 2016, the ECO President, Joost van Iersel, attended a presentation and a discussion of a report on the outcome of the Eurochambers' questionnaire distributed among 50.000 European companies, mostly small- and medium-sized. The meeting was hosted by the Union of Chambers of Turkey.

The main finding of the Eurochambers' report is that business confidence for 2017 falls slightly compared to 2016 but, conversely, expectations for domestic sales, export sales and investment for 2017 improve with respect to 2016. The employment indicator remains on average similar to that of the previous year. Productivity is not rising, while R&D spending is under pressure. Domestic demand, economic policy conditions, labour costs and a lack of skilled workers were identified as the main challenges for the future. The European economy is still in a low tide, and the outcome of the questionnaire reflects to a large extent this picture, revealing uncertainty and hesitations in business about developments inside and outside the EU. The Commission pointed to the fact that the European economy is more or less at the same level as just before the crisis of 2008. The deep downsizing has been overcome by now, but socio-economic policies are constantly challenged not only by the overall weak economic trends, but also by asymmetric shocks, such as robotics, Industry 4.0, Brexit and shocks to current business models. In international trade uncertainty is fed by CETA and TTIP. The discussion focused very much on the deficiencies in the internal market that are damaging to potential investments. An unstable political climate further undermines confidence.

Mr van Iersel underlined that 28 industrial policies with a variety of national legislations and national support programmes offer, in contrast to what is envisaged, no trustworthy context for a broad revival of European investments or for successful start-ups or scale-ups. The gap with the US is increasing. The Commission representative compared the current situation to the one in the late fifties of last century when a series of very disruptive developments ultimately led to a very productive shock, i.e. the foundation of the European Economic Community. We are now facing a fundamental paradigm shift in the world economy and in economic conditions that forces Europe to make courageous decisions once again or, otherwise, to muddle through without a clear view on what might happen in the end. The current uncertainty is translated in low confidence in business, which consequently has a negative effect on investments.

A general conclusion of the discussion was that it is high time that the European institutions agree on a common way forward to reinforce the single market, which is still far from complete and continuously challenged by incongruous national policies. This survey could serve positively as a tool in the necessary discussion to promote that goal.