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The EU suffers from ‘norm-creation delirium’, sapping businesses’ understanding of their legal obligations and impeding on their competitiveness, Patrick Martin, President of the largest French business association MEDEF, said on Monday.
In this “confused and threat-heavy period,” marked by ongoing inflationary pressures and growing Sino-American tensions, it is crucial that businesses get all the visibility they can on norm and rule-creation, Martin said in opening remarks at the MEDEF’s annual meeting on the outskirts of Paris on Monday.
The ecological crisis, but also “demographic, societal, technological, democratic, geopolitical […] and financial challenges,” are such that companies and entrepreneurs need “coherence, a clear, constructed and stable way forward,” the president added, pointing the finger at what he deems to be the EU’s erratic norm-creation.
“The EU generates as much frustration and irritation as it gives us hope,” Martin said, blaming “norm-creation delirium”, giving the private sector not enough time to adapt.
This echoes French President Emmanuel Macron’s call for a ‘European regulatory break’. First introduced in May, he mentioned the idea of a break again on Monday in his annual speech to ambassadors, saying “If I had to summarise [my thinking] bluntly: Europe tends to over-regulate and under-invest,”.
Such legislative overload is coupled with a level of EU inertia that is incompatible with the US’s “speed in policy implementation,” Martin went on to say, in an apparent reference to the impactful roll-out of the unprecedented US green ‘Inflation Reduction Act’ (IRA) investment plan.
The IRA, first introduced by the Biden administration in August 2022, enshrined $400 billion worth of subsidies and tax breaks to support American green industry growth.
Martin, whose MEDEF represents 190,000 companies and about 10 million jobs, especially warned against any attempt to exclude nuclear as a technology deemed compatible to support the decarbonisation of the EU economy: “We will look to be more clearly heard [in Brussels] on issues as important and urgent as energy, and nuclear,” he said.
The Commission’s Net-Zero Industry Act, a wide-ranging piece of legislation destined to decarbonise EU’s industry and presented in March, now recognises Small Modular Reactors (SMRs) as a technology that could contribute to decarbonisation.
Tax cut phase-out
Monday’s large gathering of French business entrepreneurs comes as the government prepares for the 2024 budget bill – and Economy Minister Bruno Le Maire committed last week to slashing public spending by €5 billion in the next year, all the while making France the EU’s first green economy by 2040.
France is one of the most indebted EU member states, topping 111.6% of GDP by April 2023, relative to a euro area average of 91.6%. The deficit also sits at 4.7% of GDP, far beyond the 3% threshold enshrined in EU treaties.
This notwithstanding, “our economic results are bulletproof,” Le Maire told a set of entrepreneurs last Thursday (24 August), claiming the French economy had performed better than that of Italy, Germany and Spain since 2017, while over 2 million new jobs were created, in a tribute to the government’s “supply-side” economics.
French economic growth is due to top +0.7% in 2023. Inflation, at a historic 6.3% in February, is on a downward trend, reaching 4.5% in July 2023.
He also vowed to remove specific production taxes, which he claims weigh on companies’ competitiveness, as they are currently “seven times more taxed than German counterparts,” he said last Thursday.
The suppression is to be phased out over the next four years up to 2027, unlike previous government commitments to aim for a complete end by 2024. This elongated phase-out is a “very negative sign,” which does not contribute to entrepreneurs’ trust in the executive, Patrick Martin said.
(Theo Bourgery-Gonse | EURACTIV.fr)
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