Advisory and Support Group, CEO Event · Page 2 A A PPT P F BEEPE - CE EET. DECEMBER ....

Advisory and Support Group, CEO EventEuropean Commission, Berlaymont Building3 December 2015, Brussels

Dear Members of the Advisory and Support Group of BUSINESSEUROPE,

On the occasion of our 5th ASG CEO event, we will have the opportunity to have high-level exchanges with the President of the European Commission, two Vice-Presidents, two Commissioners and the Secretary-General. We will focus on policy areas strongly influencing the competitiveness of companies, such as digitalisation, research, innovation, better regulation and investment.

Our guest speakers will also benefit from the exchanges with you, a strong group of business leaders from a diverse range of major firms. Your active participation is therefore fully encouraged.

We gather at an important time. The European institutions ended their first year of work, which was characterised by important developments and by new challenges, both in Europe and at its borders. The recently published BUSINESSEUROPE Autumn Economic Outlook indicates that over the last six months, EU businesses have experienced a continuing gradual economic recovery. With oil prices remaining low, a still relatively low Euro exchange rate and ECB support, the EU’s economic recovery is expected to continue.

However, both the EU and its Member States urgently need to press ahead with growth-enhancing structural reforms that raise potential growth and ‘lock-in’ the present recovery. The ongoing growth slowdown in emerging markets is likely to create a more challenging global trading environment which underlines the need for reforms to support competitiveness.

Industrial competitiveness must be at the heart of European agenda. The need to focus EU policies on actions to make Europe more competitive is the only way to deliver more growth and more jobs. Otherwise, our industrial decline will threaten growth and jobs in all sectors of activity.

From now on, and in the coming years, it will be crucial to focus on the key priorities for our continent, companies and people, if we want to achieve sustainable and consistent growth; but this can only happen if we create an environment conducive to investment. More decisive and concrete action is needed to instill confidence in business and to encourage a job-rich recovery.

This document contains some policy background notes of BUSINESSEUROPE that we hope will provide you with a helpful basis for a fruitful discussion.

We thank you for your support to BUSINESSEUROPE and look forward to a stimulating event.

Markus J. BeyrerDirector General

Emma MarcegagliaPresident

Ref. Ares(2016)5693159 - 30/09/2016

Jean-Claude JunckerPresident of the European Commission

3 DECEMBER 2015ADVISORY AND SUPPORT GROUP OF BUSINESSEUROPE - CEO EVENT

BUSINESSEUROPE KEY MESSAGES

1 BUSINESSEUROPE fully supports President Juncker’s overarching priority: to put policies thatcreate growth and jobs at the centre of the agenda of the Commission. We share the aim of “being big on big things, and small on small things”. We also believe that his decision to streamline the structure of the new Commission and create “Project Teams” headed by one of the Vice-Presidents should help to focus EU policies on actions to make Europe more competitive in order to deliver more growth and more jobs.

2 In 2015, the main priority of the Commission was to put in place an EU Investment plan. Webacked this initiative. The slogan of BUSINESSEUROPE Day 2015 was “Invest in Europe”. Now that European Fund for Strategic Investment (EFSI) is in place, the focus must be on ensuring that EFSI guarantees are used efficiently to leverage private investment which would not take place otherwise. The second key element for effective delivery of the announced leverage effects is to swiftly improve the investment climate in Europe.

3 Smooth functioning of the Economic and Monetary Union (EMU) is essential to strengthen theEuropean economy. President Juncker deployed considerable efforts to keep Greece in the Eu-rozone. BUSINESSEUROPE welcomed the agreement reached on the 3rd support package for Greece. We stressed the necessity to implement the structural reforms and budgetary measures promised by Greece as part of this deal. We also underlined the need to further improve gover-nance in the EMU. While supporting the aims of the Five Presidents report identifying the key issues to be tackled, we believe that a greater sense of urgency is needed.

4 BUSINESSEUROPE appreciates President Juncker personal engagement to the asylum seekersand refugee crisis. In many EU countries, federations and companies are contributing to finding practical solutions to help dealing with this challenge. While acknowledging that Europe cannot accommodate unlimited numbers of people coming to our continent, BUSINESSEUROPE and its members recalled the importance of attracting talented people from around the world to study, work and live legally in Europe given the ageing of our population.

5 The Commission Work Programme for 2016 puts the emphasis on the social dimension of Eu-ropean integration. BUSINESSEUROPE pleads for a competitiveness friendly approach to EU social policy, focusing on labour market reforms (flexicurity agenda). We oppose a revision of the Posting of Workers Directive. Abusive situations should be tackled through effective implementa-tion of the existing rules that apply. Diverting energies in protracted discussions on new rules for posted workers will create legal uncertainty and undermine cross-border activities in the single market.

6 Industrial competitiveness must be at the heart of the European agenda. Our industrial declinethreatens growth and jobs in all sectors of activity, including services. To get a sustainable re-covery, progress is needed on EU actions to support the digitalisation of industry, to conclude ambitious trade agreements such as TTIP to strengthen our position in global value chains, and ensuring secure access to energy at competitive prices.

ADVISORY AND SUPPORT GROUP OF BUSINESSEUROPE - CEO EVENT 3 DECEMBER 2015

Mr Jean-Claude Juncker (Luxembourgish) was President of the Euro Group from 2004 to 2013 and Prime Minister of Luxembourg since 1995 before becoming Commission President in November 2014. The structure of the Juncker Commission is different compared with previous Colleges with work organised along the lines of Project Teams, with a more coordinating role for the Vice-Presidents to deliver on its 10 core priorities.

The “Juncker Commission” took office on 1 November 2014. President Juncker's nomination was endorsed by the European Parliament on the basis of 10 strategic guidelines: a new boost for jobs, growth and investment; a connected digital single market; a resilient energy union with a forward-looking climate change policy; a deeper and fairer internal market with a strengthened industrial base; a deeper and fairer economic and monetary union; a reasonable and balanced free trade agreement with the U.S.; an area of justice and fundamental rights based on mutual trust; a new policy on migration; and a stronger global actor and a union of democratic change.

In its first year of work, the Commission has managed to issue an Investment Plan, propose a new trade and investment strategy as well as a new Single Market Strategy, a Capital Markets Union, Energy Union and a Banking Union. In addition, it had to cope with emergencies such as the Greek bailout and the migration crisis.

On 9 September 2015, President Juncker delivered his annual State of the Union speech, where he again emphasised the need for a European solution on migration. He also pointed to the urgent need to make European economy more competitive through continued structural reforms, but also through an ambitious trade agenda and in particular the conclusion of the TTIP negotiations. President Juncker made clear that: “The crisis will be over when full employment returns to Europe”. On COP21, he commented that a global problem can only be solved at global level. Therefore, there is a need for major international partners to match the EU level of ambition by concluding an ambitious, robust and binding global climate deal.

On 27 October 2015, the European Commission presented its 2016 Commission Work Programme in Strasbourg. Like the first annual Work Programme, it follows the lines of the Juncker ten-point plan. For example, its focusses on trade and the commitment to make progress on TTIP, the action plan on ‘Capital Markets Union’, and making the single market work better and more attention on SME development and entrepreneurship.

BACKGROUND INFORMATION

PROFILE


1 BUSINESSEUROPE welcomes the Commission’s strong emphasis on the digital economy.Embracing the digital revolution is crucial to ensure Europe’s competitive advantage globally.

The digital economy is essential to improve Europe’s competitiveness in the global economy and deliver growth and jobs. Europe needs to create the conditions to enable its future digital revolution.

The roll-out of the European Digital Single Market Strategy must encourage investment, take into account the need for Europe to reconsider its risk-opportunity balance and follow the innovation principle. It should address the remaining barriers to the free flow of data within the single marke-and internationally, which strongly affect the digital single market.

2 Europe needs to put its strengths together and create a European model of digital industrywhich will be successful worldwide.

The ongoing fourth industrial revolution is transforming industry, and will help deliver efficiencies to EU manufacturing and services. By 2025, Europe could see its manufacturing industry add a gross value worth 1.25 trillion euros. But if we fail to turn the digital transformation to our advantage, potential losses can be up to 600 billion euros by 2025 – like losing over 10% of Europe’s industrial base.

We need to define our own approach to digitalisation, based on first-class manufacturing, adequate protection of privacy, confidentiality and integrity of data, strong security and IP. Trust is the keyword if we want EU industry to take up digital technologies. We need to establish an innovation-friendly framework, speed up broadband development, together with an inclusive approach to standards and interoperability. This should be complemented with ensuring the availability of skills and respond to the new challenges of digitalisation related to the workforce.

3 Take advantage of the opportunities offered by the digital single market by removingremaining barriers by developing a legislative framework which enables companies to exploit the potential of data-based innovation.

Digital is horizontal and has a cross-cutting impact on all sectors of the economy. In particular, digital is deeply transforming the single market. This is related not only to the movement of digital goods, but also to the fact that now physical goods and services must move freely in the single market thanks to digital tools. Thanks to e-commerce, businesses can benefit from a wider market, which will also mean more choice and lower prices for consumers.

Improving consumer confidence and business opportunities must be a top priority. The unexploited potential of e-commerce is clear when considering that online trade represents only 5% of total retail sales.

Günther Oettinger, European Commissioner for the Digital Economy & Society



Working on the reform of the telecoms rules, modernising copyright rules and consumerrules for online and digital purchases;

Supporting the jobs, growth and investment package aimed at leveraging additionalpublic and private investment for infrastructure, such as broadband networks;

Fighting cybercrime;

Overseeing the conclusion of negotiations on the EU data protection rules, as well asthe review of the Safe Harbour arrangement with the US;

Championing digital and e-government approaches across all Member States andwithin the Commission.

Mr Günther Oettinger (German) is since November 2014 Commissioner for the Digital Economy and Society. From 2010 to 2014 he was Commissioner for Energy in the Barroso Commission. Mr Oettinger’s role is to support the development of the digital economy and contribute to projects steered and coordinated by Vice-President Ansip for the Digital Single Market and Vice-President Katainen for Jobs, Growth, Investment and Competitiveness.

The mandate of Commissioner Oettinger focuses on completing the digital single market, in particular by:


PROFILE

He also has a number of specific responsibilities, including encouraging entrepreneurship and providing a framework that drives start-ups, the take-up of new businesses and job-creation, in particular by ensuring the development of cloud, Internet of Things and big data, as well as supporting the work aimed at reinforcing digital skills.

Commissioner Oettinger’s major initiatives so far are the adoption of the Digital Single Market Strategy in May 2016, as well as the launch of the roundtable debates on Digitalisation of Industry with the objective of reaching an EU approach to build on the strength of national industry platforms.

He is also strongly involved in the discussions around international data transfers and the Safe Harbor negotiations (under Commissioner Jourova’s leadership).

Carlos Moedas, European Commissioner for Research, Science and Innovationty



1 The European Union’s prosperity is based on high added value products and services.It largely depends on its innovation capacity and creation of an open and common marketplace of ideas, turned into an economic value.

In the interest of its global competitiveness, the EU will have to regain the innovation leadership and capture more added value from innovation through an investment-friendly environment, as well as by scaling up investments in R&D and especially in close-to-market innovations.

2 The EU will have to build a true culture of innovation, encouraging reasonable risk-takingrather than over-playing the precautionary principle, and balance it with an “innovation principle”.

The innovation principle concept means that “whenever EU institutions consider policy or regulatory proposals, impact on innovation should be fully assessed and addressed”. A culture change is required to protect Europe’s ability to innovate and to stimulate investment, jobs and growth, for the benefit of society; including consumers, regulators and producers.

3 The EU will have to guarantee a more important role for scientific and technological evidencein the policy process, as well as a strong consideration of the impact on innovation.

We believe that the decision to set up a new High Level Group of Scientific Advisors will support the policy-making activity providing high quality, timely and independent scientific advice. This will contribute to the quality of EU legislation, in line with the Better Regulation agenda.

4 Due to steadily declining industry participation in the framework programmes, the EUneeds to incentivise higher involvement of the business sector.

The EU should adequately align Horizon 2020 objectives with industry activities through sufficient consultation and provide for consistent figures through business participation. The business community is concerned with the issue of oversubscription and low success rate of applications (down to 12%) that affect the appetite of companies to apply for co-funding of their projects from the EU. Also the declining participation of businesses since 4th Framework Programme is an issue.


The European Commission is embracing the Innovation Principle being stronglyconvinced that it will help to achieve the objective to protect Europe’s ability to innovateand to stimulate investment, jobs and growth, for the benefit of society.

Another important initiative of the European Commission is the Scientific AdviceMechanism. In line with previous efforts and activities of the Commission on ScientificAdvice Mechanism (SAM), the Commission took the decision in December to set up anew High Level Group of Scientific Advisors with the aim to support the policy-makingactivity providing high quality, timely and independent scientific advice.

Horizon 2020 is another important milestone as it represents the key EU financialinstrument for research and innovation. In October, the Commission launched the newHorizon 2020 Work Programme for 2016-2017. Almost €16 billion was allocated, onthe basis of a set of priorities in line with the "Open Science, Open Innovation, Open tothe World" agenda.

The European Commission also has the declared aim to improve the impact of Horizon2020 funding. With this purpose, the Commission held a Stakeholders meeting onsimplification in September 2015, where BUSINESSEUROPE raised the issueof oversubscription and low success rate of applications, an Online Survey on theSimplification of H2020, as well as planned mid-term review of Horizon 2020. Possiblesynergies with structural and investment funds should also help address these issues,therefore the Commission recently introduced the Seal of Excellence.

Mr Carlos Moedas (Portuguese) is the Commissioner for Research, Science and Innovation in the Juncker Commission. From 2011 to 2014 he was Secretary of State to the Prime Minister of Portugal. Mr Moedas’ role is to strengthen research capacities and innovation, ensure that EU funding is well-allocated and to ensure that Commission proposals are based on scientific evidence, as well as encourage private companies to apply research.

The Commission is working on several policy areas which are crucial for the development of European Research, Science and Innovation fields:


PROFILE

Commissioner Moedas will speak on innovation and scientific evidence at the High-level Conference “Better Framework for Innovation” co-organised by BUSINESSEUROPE and a number of partners, including VNO-NCW on 26 January 2016.

Frans Timmermans,First Vice-President of the European Commission


1 Agree an inter-institutional agreement on better regulation.

The EU must improve its competitiveness to hold its own against both developed and emerging economic blocs around the world. Taking a smart approach to regulation, boosting competiveness and developing the single market through the use of better regulation tools to cut red tape and devise proportionate legislation should be a mind-set of all policy – and decision-makers. All EU institutions must work together to achieve better regulation in the EU.

The Council and European Parliament should make better use of impact assessments which should be updated to assess the impact of burdensome amendments. There should be increased transparency about the reasons and impact of any Member State decisions to add requirements that negatively affect the single market, competitiveness and growth when they are transposing EU legislation (“gold-plating”).

These issues should be part of an inter-institutional agreement on better regulation which the institutions should swiftly agree.

2 Increase transparency to ensure effective stakeholder involvement throughout thelegislative process.

All stakeholders affected by possible EU action should have the opportunity to give their views about initiatives and the evidence and information that is used to support them, not only at an early stage when policy concepts are not yet precisely defined, but also later when more detailed provisions are drafted.

The Commission should publish final draft texts and the draft impact assessments before the initiative is adopted and there should be more transparency about trilateral negotiations between the Commission, Council and European Parliament.

3 Reduce burdens through an effective REFIT agenda.

Channel information about burdensome rules and ensure that stakeholder suggestions for burden reduction are subject to a response based on a “comply-or-explain” principle delivered by the Commission. There should be a net target to reduce costs defined for the totality of regulatory costs in all policy.

Proposals to change legislation to remove excessive burdens, inconsistencies, obsolete or ineffective rules, must deliver a real difference on the ground for businesses and citizens. The changes introduced during the legislative process should thus not add any further requirement on businesses and citizens. The Commission should be prepared to withdraw proposals if it is likely that the end result will be more burdens and it is important that constant dialogue with stakeholders takes place throughout the legislative process.


Mr Frans Timmermans (Dutch) is the First Vice-President of the Juncker Commission responsible for better regulation, inter-institutional relations, the rule of law and the Charter of Fundamental Rights. From 2012 to 2014 he was the Dutch Minister of Foreign Affairs. Mr Timmermans main task is to put better regulation at the heart of the Commission’s work and to ensure that every proposal respects the principles of subsidiarity and proportionality.

In his capacity as First Vice-President, Mr Timmermans has made a proposal for a new inter-institutional agreement with the aim to legislate better. He proposes that the Council and European Parliament should carry out an impact assessment on any substantial amendments that they propose during the legislative process. They should assess the likely economic, social and environmental impact and regulatory burden before any final decision is taken. In addition, he has urged Member States to avoid unjustified "gold plating" of EU rules when transposing them into national law and explain the reasons for any such gold-plating when they do so anyway.

Overall, First Vice-President Timmermans is very concerned about citizens’ and businesses’ confidence in the EU. He is determined to change both what the EU does, and how it does it, to show that the EU, its institutions, and its body of law, are there to serve citizens and businesses who must see this in their daily lives and operations. In order to achieve these goals, he has presented a Better Regulation Package in May to open up policy-making to make the EU more transparent and accountable, but also to ensure that policies are based on the best available evidence which makes them more effective.

Stakeholder consultations and impact assessments throughout the legislative process are key tools and he also announced a stakeholder platform for burden reduction proposals.

First Vice-President Timmermans is very eager to stress that better regulation is not about favouring certain policies or objectives over others. It is about being clear on the objectives, whatever they are. It is about ensuring that the policy solution is the best and least burdensome way to reach those objectives and it is about being honest about how well solutions are working. All significant impacts - whether positive or negative, quantifiable or not – should be analysed and considered.


PROFILE


Jyrki Katainen, Vice-President of the European Commission


1 BUSINESSEUROPE welcomes the commitment of the European Commission to prioritiseinvestment through the European investment plan.

Investment is the main priority of the European Commission and rightly so, because investment is the basis of our future competitiveness, growth and jobs.

There are many good reasons to invest in Europe. We have a market of 507 million people that comprises 21 million businesses. The EU is still the world’s largest economy with overall GDP more than that of the US or China, Japan and India combined. And we are home to a highly educated and skilled workforce.

But our share in global foreign direct investment flows has dropped from 40% in 2000 to 17% in 2013. Private investment is still 11% below pre-crisis levels. And overall (public and private investment) is at a 20 years low. Our competitors are recovering much faster from the crisis. We want to restore Europe’s attractiveness as a place to invest in.

2 Removing barriers to investment is key to making Europe an attractive investment location.

The EU will only achieve the increases in investment that are necessary to boost long-term growth and employment if significant improvements are made to the business environment through better regulation, broader structural reforms, reduction of obstacles to investment and decreases in the costs of doing business in Europe.

It is important that burdensome and expensive regulation burdens are kept to a minimum. In particular, the EU must act so that regulatory uncertainty is reduced, and must continue to address existing barriers to the single market. It is urgent to reduce costs of doing business in Europe, addressing the high level of taxation, high labour costs and high energy prices.

3 The European Fund for Strategic Investment (EFSI) can also play an important role inhelping investment get the ambitious leverage aimed at by the EFSI

We welcome the creation of the EFSI, as it builds on the principle of using small amounts of public money to leverage private investment, although the EFSI must ensure that its investment is additional and that the use of public money does not replace or ‘crowd-out’ private investment that would have taken place in any case.

Projects to be financed must be selected on sound economic grounds, based on their impact on growth and employment, and not on political grounds. Important areas for investment include infrastructure projects increasing Europe’s interconnectivity in transport, energy or broadband, research and innovation as well as to education and training projects answering companies’ needs.


mobilising investments of at least €315 billion in three years

supporting investment in the real economy

creating an investment friendly environment.

Mr Jyrki Katainen (Finnish) is since November 2014 Commission Vice-President for Jobs, Growth, Investment and Competitiveness. From 2011 to 2014 he was the Prime Minister of Finland. Mr Katainen has been entrusted with the task of steering and coordinating the work of several Commissioners, among whom the Commissioners for Economic and Financial Affairs, Employment, Internal Market and Industry, Financial Stability, Financial Services and Capital Markets Union; Digital Economy and Society; and Climate Action and Energy.

Vice President Katainen’s major initiatives so far have been around the launch of the EU Investment Plan in December 2014. The stated goals of the plan are threefold:


PROFILE

To achieve these goals, the Commission is working in two main areas. Firstly, to develop a series of policy measures to improve the EU investment environment. These include the Energy Markets Union, the Capital Markets Union and effort to improve regulation.

In addition, the Commission has announced a new initiative, the European Fund for Strategic Investments (EFSI) to operate in partnership with the European Investment Bank to help use public funds (16 billion euro in Commission guarantees + 5 billion of EIB money) to leverage private investment. The focus of the EFSI will be on investment in infrastructure and innovation, as well as finance for SMEs.

The EFSI became operational in September 2015, having gained the necessary approval of both the parliament and the Ecofin Council. By the end of October, 13 projects had already been agreed under EFSI, accounting for an overall investment volume of 9.4 billion euro. In addition, the European Investment Bank has pre-financed using their own capital, another 15 projects until EFSI is fully operational.

The European Investment Fund (EIF) has also signed more than 50 operations under EFSI, with total financing exceeding EUR 1.2 billion, which is expected to trigger more than EUR 17 billion of investments. 65 000 SMEs and Midcaps are expected to benefit, including in Belgium, Bulgaria, Czech Republic, France, Germany, Italy, Luxembourg, Netherlands, Poland, Portugal and the UK. The recruitment process of the Investment Committee experts is nearly complete with the Commission expecting that the committee should be in place in November.


Alexander Italianer, Secretary-General of theEuropean Commission

1. A new boost for jobs, growth and investment

2. A connected digital single market

3. A resilient energy union with a forward-looking climate change policy

4. A deeper and fairer internal market with a strengthened industrial base

5. A deeper and fairer economic and monetary union

6. A reasonable and balanced free trade agreement with the U.S.

7. An area of justice and fundamental rights based on mutual trust

8. Towards a new policy on migration

9. A stronger global actor

10. A union of democratic change

Since 1 September 2015, Alexander Italianer (Dutch) is the Secretary-General of the European Commission. From 2010 to 2015 Mr Italianer was the Director-General of DG Competition and before that, from 2006 to 2010, Deputy Secretary-General in charge of better regulation and Chairman of the Impact Assessment Board.

The task of the Secretariat General is to bring coherence and coordinate the work of the Commission to ensure that it delivers on its 10 priorities:

PROFILE


Advisory and Support Group, CEO Event · Page 2 A A PPT P F BEEPE - CE EET. DECEMBER ....

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