Cut Costs or Business Will Exit For US, Chinese Markets, Employers Tell EU

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The European Union must urgently lower energy prices and ease regulations to stop industry from fleeing the continent, European businesses said on Monday, as Brussels prepared plans to stimulate the green economy.

The EU is racing to make Europe more attractive for the companies that could be tempted by massive United States and Chinese subsidies and lower energy costs.

This week, the European Commission, the EU’s executive arm, will present plans to reform Europe’s electricity market, to boost the green transition and guarantee the supply of critical raw materials.

But BusinessEurope, the EU’s main business lobby group, said Brussels’ efforts were insufficient and too slow.

“The risk of de-industrialisation in Europe is real,” warned director general of BusinessEurope, Markus Beyrer.

Many companies are already “partially or totally relocating their production outside Europe,” said BusinessEurope, which represents employers’ associations from 35 countries.

The commission on Thursday loosened state aid rules for companies in sectors that help reduce carbon emissions as part of its response to subsidies offered elsewhere.

BusinessEurope however called for more action including cutting taxes on energy and keeping them low to reduce businesses’ bills.

“Policy-makers should not be fooled by … declining energy prices,” Beyrer said, adding, “They will remain higher than for our main competitors.”

The business lobby might be expected to demand cost cuts but some real world impact of the problem has already been seen.

German chemical giant BASF said in February it would close several units in Germany because of high energy prices affecting competitivity in Europe.

Beyrer also pointed to tougher regulation as their top problem after high energy prices, according to a recent survey of its members.

“For 2023 alone, the European Commission plans to table 43 new policy initiatives on top of already 116 pending proposals … an increasing number without a proper impact assessment,” Beyrer added.

The “regulatory burden” pushes companies and investments away from the continent and “harms Europe” as a place to do business, he warned.

Source Punch