European companies call for emergency measures on energy and regulatory breathing space

The presidents of BusinessEurope’s 40 member federations have called for more support in the ongoing energy crisis as European companies struggle to compete internationally.

The business groups have also called for regulatory breathing space, not least in the area of due diligence that again threatens to put European business at a serious disadvantage compared with global competitors.

The federations gathered in Stockholm at the invitation of the Confederation of Swedish Enterprise and presented their priorities for the future Swedish presidency of the Council of the EU.

They also discussed how the EU should support industry during the energy crisis while preserving the single market with commissioner Thierry Breton.

BusinessEurope president Fredrik Persson said: “European companies urgently need emergency measures on energy and regulatory breathing space. The current crisis is dramatically exacerbating the risks of Europe’s deindustrialisation. We need a game-changing solution at EU level to mitigate skyrocketing energy prices, such as urgently considering a temporary decoupling of electricity prices from gas prices.

“Moreover, the Swedish presidency must join forces with the commission and the European Parliament to ease the legislative burdens for companies, for example by ensuring that the future EU rules on due diligence are manageable for larger companies and bearable for SMEs,” he added.

The European business groups are calling on the European Union to get back to basics and stop hindering European competitiveness at a time of grave crisis.

In its Stockholm declaration, BusinessEurope states: “The presidents of BusinessEurope’s 40 member federations urge the European Union to focus on its basic principles: peace and prosperity through trade and economic integration. Doing so is vital with the war in Ukraine and to allow Europe to continue playing its role in an extremely tense geopolitical context. An environment that is attractive for investments in Europe, generates long-term growth and facilitates job creation is essential to achieve these goals, and to support the ever-so-needed transition towards a greener and more digital society. Europe urgently needs a comprehensive competitiveness strategy. These are the short-term needs and longer-term challenges that imperatively need to be addressed during the Swedish presidency.”

Tackling the energy crisis and cutting back the regulatory burden need to be the main priorities, says BusinessEurope.

The federation points out that average annual retail gas prices for EU industrial consumers increased twice as much as household energy prices and are much higher than in other parts of the world during the crisis brought about by Russia’s invasion of Ukraine.

European wholesale market gas prices are between five and seven times higher than in the US. Many European businesses are absorbing these costs or only partially passing them to consumers, and more and more companies are forced to reduce production, states the group.

“With many firms’ long-term energy contracts or hedges expected to run out in the coming months and in the absence of the necessary policy response, the situation will get worse. The survival of the European industry is clearly at stake: we can see already some signs of delocalisation of production and we can fear in the near future thousands of factories closing, notably SMEs,” adds BusinessEurope.

The federation also says European companies urgently need regulatory breathing space.

“The current crisis is dramatically exacerbating the risks of Europe’s deindustrialisation, with many companies relocating partially or totally their production outside Europe. Improving employment requires to strengthen our industrial base. Better regulation, reduction of burdens on businesses and assessment of policy impacts on international competitiveness are more important than ever,” it states.

BusinessEurope says it is counting on the Swedish presidency to join forces with the Commission and the European Parliament to ease the legislative burdens for companies.

“We underline the importance of taking into account the cumulative effect of EU legislation and of avoiding unnecessary revisions of EU law, such as the European Works Council Directive or the Packaging and Packaging Waste Directive, and of agreeing on workable EU provisions in the revised Industrial Emissions Directive and on due diligence,” it says.

“In present circumstances, it is particularly important to support European companies in their efforts to deal with a tense geopolitical situation and to avoid adding to their burden by imposing due diligence requirements that are unmanageable for larger companies and unbearable for SMEs,” adds the federation.