• Key. This is the final economic blow that Sánchez prepares for the presidency of the EU

Fredrik Persson (Högsbo, Sweden, 1968) chairs since July last year the European employers' association, Business Europe, an organization that includes employers from 35 European countries -including the Spanish CEOE-, and is also president of one of the largest electricity distributors in Sweden, Ellevio AB; president of a listed housing developer, JM AB; and President of the International Chamber of Commerce of that country.

This week he will visit Madrid to participate in COPRESS, the biannual meeting of the Council of Presidents of Business Europe, which this year is being held in the Spanish capital because our country will hold the next rotating presidency of the European Council. At this summit, the representatives of European companies will define their priorities for this mandate, which they will then transfer to the Government. Persson is expected to meet with Nadia Calviño, first vice president – not with President Pedro Sánchez – and with King Felipe VI.

What are the priorities of companies for the presidency of Spain? For us this is more of a marathon than a sprint. The key is in one word: competitiveness. I think we have to be realistic and realise that European companies and Europe are lagging behind in competitiveness. When we ask our members how they perceive the investment climate in Europe, the vast majority, 90%, say it has worsened over the past three years. Foreign direct investment has fallen by two-thirds from 2019 to 2021; we could say that it is an effect of the pandemic, but at the same time we see how foreign direct investment has increased in the United States by the same amount. It is important to me not to be alarming, but we need to improve the competitiveness of Europe and its industry. Why is there this problem? There are different reasons: over-regulation; the single market, which is 30 years old and is the diamond of the Union, but there are still many barriers in services, for example; and energy supply. Now that the winter has passed, the latter is no longer so much a topic of discussion, but we need competitive energy prices, because next winter could be tough. If we compare ourselves with the US, the price of energy is much lower there and there are factories that are relocating to the US, among other things because of this. The price of long-term contracts there is half or even a third of that of Europe. Innovation is also important, because we are behind. Finally, since I come from a small economy in northern Europe, another important thing is free trade and we will talk about the priorities of how to look for opportunities outside the continent with trade agreements with Chile, Mexico and also Mercosur, which we hope will go ahead during the Spanish presidency, which will strengthen and diversify value chains. How many companies are relocating to the US? It's important to note that the IRA went into effect in January. In my experience, what usually happens over the course of a year in a company is that in the December management meetings the budget for the next year is reviewed and the investment plan is defined. I would say that in all the steering committees throughout Europe they have discussed the rise in energy prices, the high inflation, and they have considered whether they dare to go ahead with their investment in Europe. What we see, but it will not translate into the transfer of factories, is that if a company is global, it will move production from its European factory to the American or Asian factory. This is already happening and we will see it in the statistics with lower GDP growth in Europe and higher growth in other countries. Companies are very shy about recognizing it because no politician will cut the noose of the factory they close, but some have officially said so, for example, battery manufacturers that are considering opening the next plant in the US or those in the automotive sector. By the time we see statistics data and American politicians cutting ties, it will be too late. I assure you that the discussions continue and that if I were a politician I would not dare to pretend that it was not happening. When we see initiatives like the IRA in the US, we start talking about the money, the 'carrot', but this also goes a lot from the 'stick', from the ease of doing business, and the ease of doing business in Europe is not as good as in other competing countries such as the US or Asia. One example we use is that in the last five years there have been more than 5,000 pages of legislation adopted in the EU. This inflation of regulation increases the costs of 'compliance' of European companies and has a great impact on SMEs, because we always think of large companies... But SMEs are the backbone of our economy and we must try to make them become great companies. Imagine having a thousand pages of legislation in a year, that means that on Monday you have 5 new rules, on Tuesday you dedicate yourself to your business, and on Wednesday you have another 5. We are very pleased that Commission President Ursula von der Leyen has proposed a 25% reduction in companies' reporting obligations. It has to be implemented quickly. There are also relocations within the EU itself, for example recently Ferrovial has announced its transfer of headquarters from Spain to the Netherlands, is it positive or worrying? We have always seen movements of factories, for lack of workers for example - that is the reason for the displacements that have occurred in Sweden, I do not know the reasons for the case of Spain. Within the market there are always decisions to move factories or research centers, it has nothing to do with the decision to go to the US. The key is that there is no flight of companies out of Europe. Are European Next Generation funds not enough to counteract US aid? We talk a lot about money, we have many initiatives in Europe and I think that there we are at the height of the United States, although we can discuss how they are deployed and at what pace. But we draw more attention to regulation and permits, which do not cost money besides, because no subsidy or all the money in the world can save us if we do not have the facility to do business, it is what is driving companies out of Europe. Are these European funds reaching companies? It is a bit early to say yet and I think it varies from country to country, but I am confident that we will see positive effects in the coming years. In addition to hyper-regulation, what other factors hinder European competitiveness? There are also permit deadlines, which are very slow in Europe. If you decide to start a business, the uncertainty is... if you want, for example, to assemble a wind turbine in Europe, the permit will take between 7 and 10 years. How is it possible to carry out the green transition if those are the deadlines? To be clear: I am not saying that permits should be eased, but that they should be speeded up. For example, in the medical technology industry, a permit in the US for new equipment takes 3 to 4 years and here twice as long. It should not be less safe in Europe, but the same as in the US. Energy prices also play a role, and they need to be more competitive.Are European companies contributing to inflation? Everyone is contributing to inflation, but if you ask if companies are contributing more, or talk about 'greed-dico', I think that's generally not the case. We can find some specific companies doing it, yes, but in general companies are assuming the increase in costs without transferring them. They are being responsible and so are the unions. In Spain companiesIf you are the target of government criticism, does the same thing happen in other countries? I do not know the Spanish situation, but I think that, in general, what we have seen during the autumn and with the effects of the war in Ukraine in Brussels is a closer interaction between companies and politicians, because politicians understand that companies are key in the transition and for the future of Europe. So I would say no in general terms. The general discussion is how companies can be part of the solution and not part of the problem. The green and digital transition we are in and even the geopolitical transition we are in because of Russia's war in Ukraine is changing European life. It is important for businesses to move in the same direction and the competitiveness of companies is key to Europe's future success. In a democracy we will always have discussions and challenges for politicians and for companies and that is good.Do you think that Spanish employers have a strong role? The latest pension reform has been approved without it... I think that when we talk about reforms in Spain, such as the labour market or the pension system, it is a national matter and it does not have to be resolved at European level, but in general terms I would say that, of course, when these types of decisions are taken it is wise and intelligent to include both social partners. The reason is that both employers and unions bring experience to the table and then we will live with those decisions for a long time. I always emphasise the importance of politicians using social dialogue.

  • Enterprises
  • European Union
  • Pedro Sanchez
  • Nadia Calviño

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