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Monday, November 11, 2013

Business leaders and entrepreneurs across Northern Europe add weight to EU reform agenda

When a group of business people who, amongst them, have helped to lead companies that employ around one million people, say something, it's a good idea to listen.

In an unprecedented joint initiative, leading business men and women from across Northern Europe used a letter to the Sunday Times and op-ed articles published in today's Frankfurter Allgemeine Zeitung and Dagens Industri to call on EU leaders to grasp the nettle and embrace reform.

The list of signatories, who have all signed in a personal capacity, includes household names and is particularly significant because many have not spoken out on the issue of 'Europe' before. They include Karl-Johan Persson, the CEO of Swedish retail giant H&M, Dr. h.c. August Oetker, Chairman of renowned German food producer, Dr. Oetker, Douglas Flint CBE, Group Chairman of HSBC Holdings, Joanna Shields, Chief Executive of Tech City, and Sir John Peace, Chairman of Standard Chartered Bank.

The business leaders and entrepreneurs who have signed up to this initiative come from businesses in different sectors of the economy and, uniquely, this initiative, coordinated by Open Europe, cuts across borders.

As you can see below, this has already caused quite a splash in Sweden, with the front page of the financial daily Dagens Industri carrying the headline "Come on, EU!":

In Germany, six business men and women including Dr h.c. August Oetker, Chairman of the Oetker Group – one of Europe’s largest family-owned businesses – and Marie-Christine Ostermann, former head of the German Association of Young Entrepreneurs, wrote an article arguing that, "The EU does not have to move towards 'ever closer union,' but needs to become ever more open and flexible":

In a letter to the Sunday Times, 52 British executives and entrepreneurs demand a “bold reform agenda” focused on trade and transparency:

This joint initiative shows that there is a market across much of Europe for an EU reform agenda centred on making the EU more business-friendly, internationally competitive and democratically accountable. However, the only way to do that is to make the arguments heard across Europe and put so much pressure on politicians that it cannot be ignored.

This is the first step in pushing a robust reform agenda ahead of the European elections next year and beyond, and we will be encouraging plenty more entrepreneurs across Europe to sign up to this initiative. So watch this space!


Denis Cooper said...

"The EU does not have to move towards 'ever closer union,' but needs to become ever more open and flexible"

What is the point of having it written into solemnly agreed international treaties that the parties are committing themselves to something - in this case, a process of 'ever closer union' - if they don't see any need for it and in fact don't want it?

I come back to the proposal for a 'mandate referendum' in the UK, through which its citizens would be asked directly whether they wish to proceed further with the process of 'ever closer union' prescribed by the EU treaties.

jon livesey said...

There is a widespread misunderstanding about the "ever closer union" phrase. It appears in the prologue to a treaty, not in the treaty itself.

Prologues lay down general philosophies, and then they terminate with the phrase "Agree as follows". It's the "as follows" you are committing to, not the philosophical ideas.

Rik said...

Problems should prerably be foreseen and avoided.
If that is not possible they should be detected asap and prompt action should be taken. Etc etc.

However in real life things often work out in the way that the action required will first happen when there is a crisis of some kind.
This looks to be the EU scenario. decisions are made mainly from a political compromise pov not from the pov if they will work (or ven are the optimal ones).

The 2 most realistic options imho are therefor:
-the things drives itself in a wall; or
-one minute before that as a political compromise action will be taken (and possibly the wrong one).
However the EU because of its set up and its institutional problems (if not even complete incapability) re fast decisionmaking more likely imho is a former scenario candidate.
Simply impossible to make changes overnight when there is no absolute unanimity. And the latter is unlikely to happen.

Therefor imho as described above (medium or longer term) this is likely to end in a systemfailure. Either by market pressure or fed up citizens.
One should therefor prepare for both and as likely there will be a deadlock before that (and hard to judge how long that will take) effectively for 3 scenarios.
-Long term low or even marginally negative growth scenario (as it is basically);
-Plug being pulled out (somewhere could be marketwise or electoral or both), probably will lead to a big mess however;
-Real structural change (the ones that give the EU a wide popular/electoral/economic(effectively all main players) platform for its future operations. Plus how this might look.

However clearly a lot of uncertainty and subsequently risk. Meaning a real bad enviroment for eg investments.
Subsequently putting even more pressure on the system.

Rik said...

Part 2.

Some remarks:
1. System change is basically only possible with unanimity.
This can either be a voluntary one or a forced one.
However the conflicts of interest to be able to do that are simply way too large. North vs South; EZ vs rest; payers vs receivers.
Made worse by the fact that a lot is national. In the way that it has to be approved at each national level. Where often there are other priorities playing.
Hard to see LePen or Wilders when in a position of power saving the EU because it didnot go with the times earlier. Political suicide for them. Or national politicians putting populist in the saddle if approving say a treaty change.

2. Leadership. Merkel is an extremely competent politician in the way of attrackting votes but an awful long term strategists.
Her relatively comfortable position gives her room to act but basically she only uses that in the shorter and medium term.
Long term she simply doesnot seem to oversee and with a risk averse nature she simply tries to avoid. Way too much focussed on shorter term political results. Only goes longer term to please the voters Like with the energy wende) not to move to sustainable policies. Long term strategy seems simply non existent. At home but also as far as the EU is concerned.
Rest is either a joke like Hollande, a lame duck like Letta or Monti, politically irrelevant (nearly everybody else).
Very little hope from the Brussels bunch as well. Present ones look totally missing the plot. Rompuy the best one will not pull that off. Saying that damp towels are as charismatic is simply an insult for damp towels. Great mediator but the rest is basically non existent.
Anyway all look to be goners. However there is no candidate that looks in anyway able to pull it off for the next run.
Furthermore it looks like PR disasters like Reding and Malmstrom might return and Schultz might even get an upgrade.
Looking at the process. Merkel seems to be able to get rid of all the quality candidates (like she messed up Barosso vs Schroder and the appointment of Draghi (not that Draghi is a bad guy, but he came with a lot of Southern conflict of interest bagage). Same with Dijsselbloom
way too light for the job, while his predecessor in Holland Dejager looked 10 times better but was politically unacceptable and therefor not even considered. Anyway it doesnot promise much.
At home similar she isnot able to groom a proper successor. Likely a disaster in the making when she leaves.
Overall: Low probablility that Brussles next generation will be able to do the job. Much more likley that it will be very similar.

3. Things will come under more pressure. Too much uncertainty is simply bad for business. And some major questions need to be answered. How to deal with aging, where to get growth from as borrowing is no longer possible and who is going to pay for all of that (especially the welfarestate).

4. Looking at the EU as a coalition/alliance it will almost certainly as well come under pressure. Simply over who will have to pay the bill. Process already started and with the EU itself institutionally unable to make the decisions even it it wished and was capable to do so.
However it is simply waiting till this ends up in the public arena. basically when Off BS guarantees have to be replaced with real money (and cuts locally to plug the EU hole).

5. The EU is not NATO. Basically after the 90s (resettlement of the East/Russia) its raison d'etre is doubtful to say the least.
For the EU however there is a task in this and future worlds.
If it will do them much good, when you messing things up, is another issue.

Rik said...

Part 3
An indication of what might happen can probably be derived from how close they can get to a real solution. Creating a wide platform for the thing.
Not the best of times for that as at national level the institutional problems look very similar with the rise of the populists and the traditionals clearly unable to counter that.
Electorate needs a reality check as well. Large part simply doesnot see that the old ways are no longer affordable and not the complete bill for the changing times can be borne by others and they themselves getting off cut free. Very volatile as well.

In a nutshell the most likley best strategy for that would be going for more legitimacy without asking for more powers first. Basically open up to the public iso simply tell them follow the all knowledgable leader. Which would be that bad as such but will end up in disaster if you start subsequently messing things up.
Basically they need a strategy to do that (but now seem to be completely focussed on more powers)
- a PR campaign (a guy or gal who can be the face of that (the anti-Barosso);
- while at the same time being able to manage it. Both from an organisational pov as well get the political acceptance from where it is needed.
Clear that all that is not going to happen, issue is how close they can get.

OE is imho too much focussed on a reform agenda. It might work it might not. However even when it would work likely in a way that it would be barely acceptable and the enxt generation problems would be basically on the doorstep.
There simply needs to be more change to make it sustainable than is likely to happen.
Anyway other scenarios are simply realistic as well so imho should better be prepared.

From there as far as the UK is concerned. It is by far the best strategic move to keep options open.
Which simply means no new links unless totally unavoidable. Or highly beneficial (sevice thing for instance) Anyway linking yourself with economic disasters as Spain, Italy (big ones only) and likely France is a very bad idea. Very likely will end bad there and the fall out will have to fall somewhere (simply better with your neighbours than with yourself). No real strategic partners anyway (rapidly declining
importance and no real historic strategic links like with the US), except may be France.

Re the reneg strategy.
It looks indeed best imho to get a wide backing for EU reform not simply a new UK-EU relation. The latter can always work as a plan B however.
Anyway in that process careful
Links as well via ordinary treaty stuff not via the EU network.
Simply plan for a plan B as well. It is simply first of all a likely scenario and second it will put pressure on the thing and pressure and a lot of it is very likely a precondition for change. Plus the appaling communicationstrategy by Cameron and Co towards the other stake holders, but that is another issue.

Anonymous said...

The UK is better off out of it.

Too many countries, including EU heavyweights like France, want to go in the opposite direction.

By the time the penny drops it will be too late, if it is not too late already. If there is any change then it is going to be half-baked and not enough.

The EU and the Euro have, in my opinion, already ruined Europe.



It was always inevitable that as the EU started to implode as a direct result of its own polices and objectives, that first the people would start to object - and and that now, as we see, even big business has woken up.

Trouble is, it will make no difference, the EUSSR is not going to change its policies or objectives due to such "local difficulties", whether people or busines. When, after all, have they ever done so in the last 50 years?

What Lord Jones called "this mess" in his recent Times article will now be reesolved only in one way, the disintegration of the EU, followed by an new arrangement between independent sovereign states.

This news is therefore not an indication that the EU will be sorted out any time soon, rather further confirmation that it is doomed.

Anonymous said...

The people who should be benefitting from the eussr are clearly not happy with the way it is going, if the idiots on the unelected commission can't see that they are fools but then again they are all failed politicians, the best way forewards is an ever loosening union, preferably with us outside of it.

Denis Cooper said...

jon livesey -

It's called the preamble, not the prologue, and it's just as much part of the treaty as all the detailed provisions that follow.

That is the internationally recognised position; for example, in Article 31 of the 1969 Vienna Convention on the Law of Treaties:


"2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes ... "

So you cannot in good faith sign up to something in the preamble to a treaty and then say afterwards that you didn't really mean it; indeed as far as the ECJ is concerned they will look to the intent expressed in the preamble to interpret specific articles, and they will hold you to that stated intent, and they may well surprise you with their resultant interpretation.

I remember you saying this years ago, and you were put right then!