Editorial. 30 April 2012 ISSUE #9. Content. di.dk/europefastforward EU Business-App Download in App Stores. 02 Promote transatlantic cooperation

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1 . Market 30 April 2012 ISSUE #9 di.dk/europefastforward EU Business-App Download in App Stores Editorial 2012 marks the 20 Anniversary of the Single Market. Much has been achieved. The Single Market has whetted competition, reduced prices, and created prosperity, growth and jobs in Europe. And still its full potential has not been harvested. The Single Market Act, which is currently in the decision process, is a step in the right direction to fill the legal gaps. To that end, DI calls for swift adoption of a unitary patent system, modernization of the public procurement framework, improvement of trans-european networks within transport and energy, and quick adaptation of the Single Market to the digital world. Ensuring a well-functioning Single Market is, however, not only about creating new legislation. We need to improve its function on the ground by effectively implementing Single Market principles and rules. This requires strong commitment by all stakeholders, especially European institutions, national parliaments and authorities at all levels. Furthermore, focus is needed on special national regulation. Each year more than 700 new national technical regulations are notified to the Commission. Only few are justified by national differences. But they all create barriers to the free movement, unnecessary administrative burdens and extra costs for businesses. DI welcomes a follow-up to the Single Market Act, by defining a set of new priority actions. Better governance must be one of them, and concrete and measurable indicators should be developed. Studies show that a complete Single Market could reap a much-needed economic benefit of 600 bn. euro if all barriers for free movement of goods, capital, people and services are eliminated. However, we must always remember that European prosperity is also created by strong links to the remaining world. In this issue, we specially focus on the great potential of enhanced transatlantic cooperation. Let the present economic situation be a driver for harvesting the full potential of the Single Market and transatlantic trade. Content 02 Promote transatlantic cooperation 03 Future Council meetings 04 Previous Council meetings 06 Q & A: Ulf Pehrsson Chair BUSINESSEUROPE Internal Committee & VP, Ericsson 08 Parliamentary actions 09 Save the date 10 Updates on the presidency DI, Brussels office Avenue de Cortenbergh, Bruxelles Director of European Affairs Ms Sinne Backs Conan Tel.: postbruxafd@di.dk EUROPE FAST FORWARD is published by The Confederation of Danish Industry every fortnight during the Danish Presidency in the EU Council. Please visit di.dk/europefastforward for further information, news, analysis, publications and much more. Get the latest Council conclusions with our free EU Business-App to be downloaded in App Stores.

2 30 April 2012 Page 2 Promote transatlantic cooperation DI Opinion: The transatlantic economy is deeply interlinked. A strengthening of the EU-US cooperation on trade and economic issues can boost growth on both sides of the Atlantic. The transatlantic economy is intertwined as never before. It accounts for 41 pct. of the worlds GDP (PPP) generating close to $5 trillion in total commercial sales every year and employing up to 15 million workers on both sides of the Atlantic. The cooperation, in a global perspective, is underlined by the fact that US foreign direct investment has been approx. 14 times higher in the EU compared to the BRICs since At the same time the EU and the US are facing equal challenges stagnating growth rates, high unemployment and declining competitiveness compared to emerging economies. Closer transatlantic relations have many opportunities to offer in today s context of the economic crisis, a challenged competiveness and new rising powers. Recently, political support for expanding relations on trade, investment and regulatory cooperation has gained impetus on both sides of the Atlantic. Business and policy-makers should use this momentum to push for concrete negotiations on a transatlantic agreement. And the potential of further trade and economic integration is enormous. The well-known ECIPE study shows that the elimination of transatlantic tariffs alone could boost EU GDP by 0.5 pct. But the unleashed potential of a new bilateral transatlantic trade agreement must go far beyond tariffs. Deeper regulatory cooperation can help reduce regulatory burdens, create common standards and benefit consumers and producers, while increasing the competitiveness of EU and US companies. History shows that international outlook and European prosperity go together. European and American leaders must resist the temptation of protectionism and instead embrace the opportunities of Atlantic cooperation. The 19 th of May, the EU-US High Level Working Group on Jobs and Growth will meet in Camp David. They are expected to present an interim report on a new transatlantic trade agreement before this summer. DI calls for a swift and comprehensive approach as European growth heavily depends on EU s ability to push for market access for European companies through bilateral trade agreements. The agreement can also serve as a positive example for the world on how solutions can be found, thus contributing to a restart of the immovable multilateral free trade track. By eliminating barriers within tariffs, standards, investments and regulation between our transatlantic economies, we can create a sort of transatlantic Internal Market for goods, services and knowledge, and harvest the total potential of our large economies. Background: The mentioned figures originate from The Center for Transatlantic Relations recently published annual survey on the transatlantic economy. Read more here.

3 30 April 2012 Page 3 Future Council meetings Financial and Economic Council Brussels, 2 nd of May 2012 DI Opinion: Regulation of the financial sector must not affect access to finance for companies negatively. Agenda (highlights) Issues for business: Capital Requirement Rules (CRD IV) The ministers of ECOFIN will discuss the Capital Requirement Directive - a dossier on which the Danish presidency expects to conclude negotiations before handing the baton to Cyprus. CDR IV will introduce intensified requirements to banks capital, such as a higher minimum capital adequacy, better capital quality and a new buffer. Furthermore, it will tighten the requirements by reducing liquidity risks. The CDR IV proposals are to be implemented by stages from In general, DI welcomes responses to the regulatory failures which led to the financial crisis. Hopefully, they can prevent similar events from occurring in the future. Despite all good intentions, tighter capital requirements in the financial sector will have a wide impact on the real economy. The new framework will require banks to reduce their lending and increase the cost of credit. Moreover, banks are likely to become more reluctant to invest in companies. Altogether, this will impair companies access to finance and thus their ability to prosper and create growth. In the light of the current macroeconomic situation, Europe s banks not only need longer respite to adapt to the CRD IV requirements. The implementation process should also address and accept the significant differences of Member States various financial structures. In addition, the combined effects of new capital requirements imposed on the financial sector such as Basel III and Solvency II should be scrutinized with a particular focus on companies access to finance and the impact on European growth. At a time when economic recovery can only be ensured by increased corporate investment, the implementation of reform measures could create an overall shortage of finance. In particular, this will affect SME s which are highly dependent on bank lending. Policymakers must obviously deal with regulatory failures. However, policymakers must also ensure financing conditions for companies enabling them to create growth and jobs in Europe. Read the agenda here.

4 30 April 2012 Page 4 Previous Council meetings General Affairs Council Brussels, 24 th of April 2012 DI Opinion: EU s cohesion policy must be directly aligned with EU2020 strategy for jobs and growth. Agenda (highlights) Issues for business: Multiannual Financial Framework The so called negotiation box is a central element in the Danish presidency s plan to conclude on an overall agreement on EU s next Multiannual Financial Framework (MFF) at the European Council in June. Last Tuesday, the General Affairs Council reached an agreement on a partial general approach concerning the EU s budget s biggest heading, the EU cohesion policy. The Council's agreement covers some of the more technical features of the future cohesion policy. Among other, the agreement specifies that funds under the cohesion policy must contribute to the EU's 2020 strategy for jobs and growth. This is in line with the position advocated by DI and BUSINESSEUROPE. The more political elements of the cohesion policy will continue on issues such as the overall sum to be devoted to cohesion policy and the eligibility of different regions. Parliamentary actions: While it is up to the Council to adopt the overall MFF, the numerous directives and regulations implementing the MFF on the ground will be adopted with the European Parliament as co-legislator. In addition, the European Parliament must give its consent to the Council s final MFF agreement. Read more from DI on an EU budget for growth here. Read the Council conclusions here.

5 30 April 2012 Page 5 Informal meeting of Ministers for Energy and the Environment Denmark (Horsens), 18 th 20 th of April 2012 DI Opinion: DI strongly supports a wider dissemination of cost-effective energy efficiency policies across Europe. Agenda (highlights) Issues for business: Energy efficiency directive EU Energy ministers agreed that the Energy Efficiency Directive should be approved before the end of the Danish presidency in June. While various compromises are still to be made, many Member States demonstrated willingness to some flexibility. DI is content that the informal meeting has reignited the negotiations on the directive. We support the presidency s efforts to reach an agreement during the Danish presidency to avoid long discussions without end date. An agreement can release the potential for energy efficiency and incentivise investments. However, policymakers should restrain from setting binding absolute targets for the reduction in energy consumption as it poses a risk for industry. To DI, it is also important that the directive can be accepted widely in the EU. Of course this demands a balanced approach with flexibility in regard of the different Member States diverse industrial structures and challenges. But the legislation must also ensure coherence and consistency between other legislative initiatives which touch the area. It is an important approach to bring down energy costs, which will increase considerably in the coming years. Ensuring a regulatory framework which encourages private investment is core and should be a main target in the continuing negotiations. 7 th Environmental Action Programme Environment ministers showed full support for a greening of the economy with resource efficiency and development of new technologies when they discussed the 7 th EAP. The objective is to create millions of jobs and improve European sustainability and competiveness. DI is satisfied that the meeting moved Europe towards the fostering of intelligent recommendations on how to make Europe the world s locomotive for sustainable solutions. But this possible European export adventure goes hand in hand with the international competitiveness of European industry. We should therefore keep strategic attention to our industrial base by first and foremost avoiding burdensome legislation and unnecessary bureaucracy. Furthermore, it is also important to underline that it is essential to ensure direct industry counselling in the process, as industry holds many of the solutions. Read more from DI on European sustainable solutions here.

6 30 April 2012 Page 6 Q & A: Ulf Pehrsson, Chairman of BUSINESSEUROPE Internal Market Committee and VP, Ericsson The Single Market is the corner stone of the EU and in the present economic situation it is our best tool for generating new growth and employment. Last year, the European Commission launched the Single Market Act, comprising 12 levers to improve the functioning of the Single Market. Decision makers are now negotiating in order to create concrete results. But more needs to be done. Therefore, a process is underway to identify 12 new priority initiatives, in other words a Single Market Act II. We have talked to Mr Ulf Pehrsson, Chairman of the BUSINESSEUROPE Internal Market Committee and Vice President of Ericsson to have his view on the priorities for the future Single Market. The Single Market offers huge potentials and is central to economic growth. Where do you see the biggest potential? - The single market is the cornerstone of European integration. Over the years, it has helped create almost 2.8 million new jobs. A strong single market remains one of Europe s greatest assets for a stable recovery from the crisis. With a market comprising 30 countries and 500 million citizens, annual cross-border investment flows of 430 billion Euros and 70% of Member States exports being destined for other EU countries, the benefits from closer integration are undeniable. Nevertheless, barriers to the free movement of people, goods, services and capital still represent an untapped economic potential of between 275 and 350 billion euro. As an example, services account for about 75% of EU GDP and 70% of total employment, with nine out of ten jobs created in services sectors. Yet, cross-border services only account for 5% of EU GDP, compared with 17% for goods. This is clearly an area with a huge untapped potential. Let s look also at the digital economy. The digital world makes it possible to overcome many physical barriers that so far prevented consumers and businesses to reap the full benefits of Europe s Single Market. This is an area that can drive up productivity and innovation in many sectors and greatly benefit all society. The EU could gain 4% of GDP by fully developing the digital single market by This corresponds to a 500 billion gain, meaning that the digital single market could have an impact similar to the 1992 Internal Market programme.

7 30 April 2012 Page 7 What are the main challenges for unleashing the full potential of the Digital Single Market? - There are tough challenges we need to face to unleash this potential. The digital world changes very quickly. It requires a clear vision and future-proof approach to regulation which needs to be proportionate and light touch. Putting in place Europe-wide digital infrastructure is the first essential step. Europe needs to make use of ICT smartly and roll-out high-speed broadband quickly. But developing these networks requires huge investments that can only be triggered by a stable and favourable regulatory environment, which gives certainty to investors. We also see that e-commerce is rapidly taking off at national level, but crossborder transactions online are lagging behind. This is a consequence of several regulatory barriers and of the applicable rules in the single market that are still fragmented, in particular in consumer legislation. As a consequence, businesses are often reluctant to operate across borders. To truly facilitate cross-border e-commerce, many issues relating to consumer confidence, delivery in different countries, online payments and interoperability need to be addressed simultaneously. Other challenges include the fragmentation of intellectual property rights, the use of e-government and the need of a balanced framework for data protection. A discussion of 12 new initiatives in a Single Market Act II is in progress. Which new initiatives would you like to see in this strategy? The Single Market is a solid instrument to revitalise our economy and contribute to getting Europe out of the crisis. It is crucial that the European Union focuses on putting forward actions that positively affect growth and employment and strengthen European competitiveness. It is particularly important to set the right framework to encourage public and private investment in areas that have a clear growth potential. A clear example is Europe s need to fully develop first-class infrastructure in transport, telecoms and energy. But most of all, it is important that EU rules are applied consistently across the board. Member states should do more to improve the quality and timing of their transposition of European legislation at national level. And what is probably even more important, is that the rules are then known and enforced correctly on the ground. European businesses rely on a strong and competitive European market. How can policy makers help ensuring this also in the long-term? The current difficult economic situation has created serious challenges coming from protectionism, weaker political support and a certain disenchantment among citizens. This could put at risk the benefits achieved and stall further progress of the single market. Policy-makers at all levels should first of all explain clearly to citizens which benefits Europe and its single market bring them in daily life. They should also be wary of any protectionist trend at national level and continue to work to ensure stronger cohesion, and a real level playing field,

8 30 April 2012 Page 8 as well as to further integrate the single market. It is important that the situation of member states is stable, that the social dimension of the single market is sustainable and the competitiveness aspects are always taken into account. Finally, if we look beyond Europe s borders, we would like to see more reciprocal actions taken by our trading partners: Europe should ensure that the openness of the internal market is a factor that is reflected in deals to open markets in third countries. Ulf Pehrsson Chairman of BUSINESSEUROPE Internal Market Committee Vice President, Ericsson Parliamentary actions Mini Plenary Session Brussels, 9 th 10 th of May 2012 Agenda (highlights): Future of Europe Statement by the President Roaming on public mobile communications networks within the Union Trade and investment strategy for the Southern Mediterranean Regional airports and air services 2010 discharge: EU general budget and others Protection of EU financial interest fight against fraud

9 30 April 2012 Page 9 Save the date CONFERENCE: E-HEALTH 2012 (7 th 9 th of May 2012, Copenhagen) The conference is an annual event co-organised by the European Commission and the Presidency targeting health ministers and government officials within health from the Member States. The conference examines how e-health can support the creation of coherent health systems, how e- health can create innovation and growth and how IT solutions can be effectively implemented. DI is a supporting partner, focusing on Danish technology within health and welfare. Read more here. CONFERENCE: FINANCING LARGE INFRASTRUCTURE PROJECTS (24 th 25 th of May 2012, Denmark) Denmark co-hosts the conference on funding for major infrastructure projects along with the European Commission. As the need for investment in infrastructure persists despite the economic crisis, the relevance of considering novel ways of financing major infrastructure projects becomes more pertinent. Read more here. SEMINAR: EU FUNDING FOR RESEARCH AND INNOVATION IN HORIZON 2020 (6 th of June 2012, Copenhagen) From 2014, Horizon 2020 is expected to have a budget of 80 bn. euro. The programme brings together EU funding for research and innovation, focusing on translating scientific breakthroughs into innovative products and services, creating new business opportunities. This seminar gives companies an overview of the enterprise-orientated opportunities in Horizon Read more (in Danish) here.

10 30 April 2012 Page 10 Updates on the presidency App for smart phones DI has launched an EU Business app for iphone and Android. The app updates you on Council meetings and other important EU events. All relevant documents and news related to the meetings are found in one place and easily forwarded by . You can get the app free of charge by download in App store (search EU BUSINESS), or by visiting our website read more here. Another way to get hold of the app is simply to scan the QR code: Newsletter and website We will of course also provide you with business opinions, interviews and calendar services through this newsletter, which will be in your mailbox every fortnight during the Danish EU-Presidency. In between, we invite you to view our website: di.dk/europefastforward for the most recent updates. For questions or comments please mail to: