European Business Summit 2014 Launch Event: “Energising Industrial Growth”

European Business Summit Launch Event 2014, Square - Brussels Meeting Centre (EBS)

European Business Summit Launch Event 2014, Square – Brussels Meeting Centre (EBS)

As we are writing the epilogue of 2013, collecting and assessing the bits and pieces of a rather important year in the EU Affairs, some people in Brussels are already pointing towards 2014, a milestone year for the EU for many. There is no doubt that one of the biggest 2014 challenges will be for the EU to return to growth track and make European business competitive again in the world’s fierce arena.

It was with this aspiration that the European business leaders invited the EU stakeholders last Wednesday to participate at the launch event of the prestigious European Business Summit 2014 that will take place on the 14th and 15th May 2014. The European Sting, a keen critical follower of business evolutions in Europe, accepted the invitation to monitor from an early stage what we can expect from European business in 2014.

EBS 2014 Panel Discussion

From left to right: Stephen Fidler, Brussels Bureau Chief at the Wall Street Journal, Vagit Alekperov, President of Lukoil, Daniel Calleja Crespo, Director-General for Enterprise and Industry at the European Commission & Reinhard Butikofer, MEP, Group of the Greens/European Free Alliance. European Business Summit Launch Event 2014, Square - Brussels Meeting Centre, from left to right (EBS)

From left to right: Sean Klein, Senior Producer at BBC News, Vagit Alekperov, President of Lukoil, Daniel Calleja Crespo, Director-General for Enterprise and Industry at the European Commission & Reinhard Butikofer, MEP, Group of the Greens/European Free Alliance. European Business Summit Launch Event 2014, Square – Brussels Meeting Centre, from left to right (EBS)

The European Business Summit decided to create awareness about EBS 2014 this year with a panel discussion with the title “Energising Industrial Growth”. The panel was comprised of Mr Vagit Alekperov, President of Lukoil, Mr Daniel Calleja Crespo, Director-General for Enterprise and Industry at the European Commission and Mr Reinhard Butikofer, MEP, Group of the Greens/European Free Alliance and member of the Committee on Industry, Research and Energy. The panel discussion was moderated by Mr Sean Klein, Senior Producer at BBC News.

Energy is a field where Europe is clearly not doing well and very few people in Brussels and beyond could argue that. Energy Self sufficiency does not exist not even as a notion here, there is no single market in energy, energy policy is fragmented while at the same time the price the European consumer pays for energy is one of the highest in the world. It is well understood that when we received this launch invitation the title of the event on its own immediately launched our expectations to the sky. Let’s see though whether our expectations were met for a deep, insightful, and effective discussion of the hot Energy topic in the Old Continent.

BBC

To begin with, we were astonished to listen to the stimulating welcome speech of Mr Klein, Senior Producer at BBC News, who challenged directly the panellists talking about weak slow growth in Eurozone and record unemployment that create the imminent risk that we “lose an entire European generation”. We were pleased that things were put in the right frame from the very beginning of the dialogue, because this is the biggest threat we are facing in Europe; sky rocketing unemployment and recession caused by wrong policies and particularly austerity obsession from our European leaders.

Lukoil

Vagit Alekperov, President of Lukoil. European Business Summit Launch Event 2014, Square - Brussels Meeting Centre  (EBS)

Vagit Alekperov, President of Lukoil. European Business Summit Launch Event 2014, Square – Brussels Meeting Centre (EBS)

As always, the interesting dialogue that EBS often introduces to the public starts directly with a stimulus from the industry. The Russian energy giant that sponsored the EBS launch event had obviously a lot to say last week from the industry’s perspective. Represented by its President, Mr Alekperov, Lukoil, Russia’s second oil company and one of the biggest in the world, came to express its worries for the European energy landscape. Emphasizing on the extensive European activities of the company, Mr Alekperov referred to the important role that his company is playing in Europe’s energy sector. At the same time he drew the attention of the participants to the closure of oil refineries of Lukoil in Europe and the uncertain soil for further energy investment. He continued by saying that the petrochemical sector provides around 800.000 jobs, half a million jobs at the marketing and logistics sector surrounding it and 100.000 in refineries.

Given its size and importance in employment for Europe, Lukoil took the opportunity during the event to claim a regulatory framework that will allow foreign energy investors to do business in Europe with less obstacles. Since it is in Europe’s best interest to keep big investors in the Old Continent, and simultaneously effectively safeguard the consumer and the environment, Mr Alekperov gave the right pass to the representatives of the Commission and the Parliament to begin their exhaustive political game.

Commission

Daniel Calleja Crespo, Director-General for Enterprise and Industry at the European Commission. European Business Summit Launch Event 2014, Square - Brussels Meeting Centre (EBS)

Daniel Calleja Crespo, Director-General for Enterprise and Industry at the European Commission. European Business Summit Launch Event 2014, Square – Brussels Meeting Centre (EBS)

The European Commission was represented last week at this panel by Mr Daniel Calleja Crespo, Director General for Enterprise and Industry. Mr Crespo started by underlining the significant timeliness of the discussion signalled by the title of launch event that concentrates on Energy, Industry and Growth. The Spanish bureaucrat expressed his relief that talking about industry is ultimately very fashionable compared to the past because it is well understood that industry drives growth and job creation. Mr Crespo argued that industrial production is the key driver of the economy. To support that he brought the example of the EU countries that survived better the crisis, the member states with significant heavy industrial activity.

Mr Crespo did not omit to admit that Europe has not seen the exit of the crisis yet. He stated that the EU has been suffering from long recession but he ascertained everyone that we are seeing the light at the end of the tunnel just now. In order to come out of the crisis as soon as possible, he believes that the Banking Union and the Fiscal Union are a must. But even those “will not be enough if we don’t reindustrialize Europe”.

According to its Director General, the European Commission plans to succeed in this European reindustrialization by setting as 2020 target that 20% of the EU GDP will be provided by the European Industry. Furthermore, Mr Crespo presented to us Commission’s five pillars of Industrial Growth:

1)      Innovations –  Many European sectors have an important role to play there

2)      Globalization –  EU needs to pursue more Free Trade Agreements (FTAs)

3)      Access to Finance – Financing European SMEs with the support of the European Parliament (Horizon 2020)

4)      Skills – Training effectively the European youth

5)      Energy – Lack of single European market, need for more integrated approach (Cars 2020, Galileo, Copernicus)

Addressing his message to Lukoil, the Director General said that the Russian giant is a European company as well and that Europe needs more long term rules to attract further investment on energy.

Mr Crespo at the end of his speech invited us to February’s European Council that will be the first Council focusing exclusively on Industrial Policy.

Parliament

Reinhard Butikofer, MEP, Group of the Greens/European Free Alliance. European Business Summit Launch Event 2014, Square - Brussels Meeting Centre (EBS)

Reinhard Butikofer, MEP, Group of the Greens/European Free Alliance. European Business Summit Launch Event 2014, Square – Brussels Meeting Centre (EBS)

The European citizen was decided to be represented last in this debate. Mr Reinhard Butikofer, Green MEP and responsible for Industrial Policy started with a sarcastic teaser towards the Russian Ambassador to the EU, Mr Vladimir Chizhov, who was also present at the event last week. He said he noticed the Ambassador’s disappointment when he first heard that the responsible for Industrial Policy at the European Parliament would be a Green MEP. Since Mr Butikofer started with a joke, he raised high the expectations of the public to see whether he can effectively represent the EU citizens’ aspiration for Industrial Growth.

The German MEP initially agreed with Mr Crespo from the Commission that talking about industry is luckily not a taboo any more. He stressed that it is very important for Europe to compete internationally and in order to do that we need to give up any protectionist intention or policy. Then he referred to the US President, Barack Obama, who once had said: “we cannot resist the industrial revolution; we must lead it”.

For Mr Butikofer Europe needs to implement innovations to its entire value chain, while the Commission needs to steer the structural base for productivity. Better industry will inevitably lead to better solution of society’s problems.

What is more, the Green MEP, just like Commission’s top official, focused on the global dimension that the energy topic should have in the EU dialogue. Climate change is not only a European but a global problem that requires global agreement and consensus. We in Europe need to reach out and engage with the rest of the world on this issue, according to Mr Butikofer. The EU should avoid more than anything isolation on the matter. In addition, he brought on the table the example of Asian countries in comparison with Europe, and particularly China and Japan that have been implementing Green technologies for years.

Last but not least, the German MEP urged Lukoil and the rest of the players in the energy field to go more Green. As he stated, even a steel plant can be Green! Further, he drew the attention of the attendees on the need to differentiate the European business environment from the world with renewable fuels, better education and training to the European human capital and more efficiency.

EBS 2014

JJD_ebs_7973

(EBS 2013)

Overall the EBS 2014 Launch Event last week in Brussels was successful. Does this mean that a two hour panel discussion was enough to give birth to the final solution on the long big energy issues at the Old Continent? We are afraid that this did not happen last week and whoever came with that expectation inevitably went home frustrated.

The aim of the EBS 2014 Launch Event was not to present a pan-European solution in a sole panel discussion but rather to apply a ‘Socratic Method’ that will give birth to useful input by the stakeholders, which will in turn lead to a solution in the long run. And the European Business Summit succeeded this goal in a delicate manner last week. That, together with significant awareness about next year’s European Business Summit that is bound to raise crucial questions and request critical answers from the EU stakeholders and business leaders on various hot topics, one of which will definitely be Energy.

The European Sting, as always, welcomes any form of respectful democratic dialogue that can be the fertile ground for stimulating insights to be heard from various stakeholders. The road to the discovery of the “Golden Cut” between the European Citizens, Policy Makers and the Industry is long and full of challenges. We are certain though that events like last week’s have the potential to light up the road in the right direction. The Sting will follow closely the evolutions on the field and will take the challenge to inform its readers about the European Business Summit 2014 in the most critical and constructive way.

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Comments

  1. Denis Hicks says:

    Of course, I am not a politician, so I did not expect to get everything. That is exactly what happened to me at the EBS Launch event “Energising Industrial Growth” – Rebuilding a Competitive Europe. It was very well attended with over 120 representatives from industry, the Commission and the Press.

    Of the speakers Vagit Alekperov, President of LUKOIL gave his refreshingly down-to-earth views on inward investment by a Russian Petrochemical company helping to ensure Europe has enough energy in the future; Daniel Calleja Crespo, Director-General for Enterprise and Industry, said his five priority areas to grow Manufacturing in Europe were Innovation, Internationalisation, Finance, Education and Energy and, finally, Reinhard Bütikofer, Member of the European Parliament from the Green Party was not specifically illuminating to me, at least..

    The main target discussed was to have 20% of GDP from Manufacturing by 2020 – up from 15% today. Thus putting Europe on a trajectory of jobs growth and prosperity.

    Credibilty comes from being realist, well planned and frugal with the money you spend. Also, it is a good idea to ensure that complex activities of any organisation have real synergy to develop a momentum that that can overcome the inevitable pitfalls and barriers.

    Lets consider an example to illustrate what has happened to Europe as the rest of the world moved on. One of Europe’s biggest infrastructure projects is the UK’s high speed train HS2. I just learned that it will take 20 years to complete of which 3 years is the actually construction. The rest is the legislative process, planning permission, purchase of land and building and the issues around contructing on consecrated land (Source BBC). Of course a lot of this is specific to the UK, except that is now increasingly built in EU laws. This timetable seems realistic, but I know of very few people who believe 20 year forecasts and the cost per km estimated at three times that of other countries who have such lines. I think that this example applies to almost many major investments in Europe. The rules for accessing land is more akin to the situation in India, rather than its global rival China. And the difference on the world stage is easy to see.

    The time to acquire the right to use land and the complexity of laws are a critical barrier to Europe’s growth. Any industrialist targeting export markets who has a choice between waiting 5-10 years to access land in Europe or getting it immediately outside of europe only had to look at his project’s fianancial spreadsheet to make a simple choice. And if he choose for Europe, he risks that his competitor will steal his market.

    Examples abound in Asia of world scale manufacturing facilities being built with 2 years because governments have built infrastructure, towns and universities around already allocated land. The assembly of mobile phones could be done in Europe by robots managed by high tech staff at a lower cost that in China – except that I have no idea where you can find the space to put the factory, global logistics hub, support services and house the workforce.

    What I wanted to hear at the seminar was ‘keep it simple, keep it fast and let industry decide what to do’. Once that is in place, Danial Crespo five priortiy areas will be a great help. And I hope that Lukoil succeeds when other European petrochemical companies seems to prefer to invest elsewhere.

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