A Confident And Outward Looking Approach
Glenys Kinnock
Minister For Europe
We May Not Be Through The Woods Yet, But As We Look Ahead To The Upturn,There Is A Clear Role For The Eu In Supporting A Sustainable Low Carbon Recovery.
The EU, as the world’s largest free trade area, plays host to 320,000 British companies; generates over 50 per cent of UK trade and half of our foreign direct investment. It remains the UK’s most important market. This year, it has been all the more imperative for the EU to maintain its free market integrity and to deliver a timely, united and decisive response to the global economic downturn.
The fact that mechanisms for coordination were already in place has allowed national leaders to come together and act collectively to ease the impact of the global downturn on families and businesses across Europe.
Since December 2008, we’ve seen unprecedented coordination with agreements to recapitalise banks; cut interest rates; increased access to credit; and guaranteed savings across Europe giving a significant boost to action taken domestically.
With such a high number of British businesses operating within Europe and between three and three and a half million jobs linked to EU trade, it was vital to UK interests to get these agreements in place. We’ve also welcomed a commitment by the EIB to provide £4 billion worth of loans to sound UK businesses to help them survive the credit crunch.
We may not be through the woods yet, but as we look ahead to the upturn, there is a clear role for the EU in supporting a sustainable low carbon recovery. Europe has proved that it can deliver politically by agreeing its own ambitious agenda on climate change. In doing so, we’ve not only set a positive example to the rest of the world as we approach the critical UN Climate Change Conference in Copenhagen in December, but we’ve also committed to helping EU businesses seize the opportunities of a growing environmental sector that is likely to equal the might of pharmaceuticals within the next few years.
I’d like to see European companies established as market leaders in environmental industries and that is why the UK is pressing for increased EU investment in green technology and in re-skilling workers for the green jobs of the future. At the same time, let’s not forget that the EU delivers most effectively when it complements national efforts, and helping businesses adapt to a changing world is a case in point. This year, the UK government has pledged a £250 million investment in low carbon business opportunities and we are encouraging other European leaders to make similarly ambitious commitments. With 500 million consumers between us, we already have a huge customer base for the green products of the future.
Many of the new green businesses will be small and medium sized which is why the UK is pushing for the implementation of the Small Business Act, to give entrepreneurs easier access to finance and markets. Better regulation is also high on the EU agenda and the business community will welcome the Commission announcement earlier this year pledging to cut red tape resulting from EU law by a further 25 per cent over the next four years. The EU has already come a long way with the cost of setting up a business in Europe now 30 per cent less than in 2002, with open and more competitive public procurement rules also resulting in a saving to business of between ten per cent and 30 per cent.
The completion of the Single Market with the implementation of the Services Directive later this year will also bring benefits, particularly for SMEs who account for nearly half of the UK service sector. Removing barriers to establishment, which are so costly to overcome, could boost UK GDP by between four and six billion pounds a year and create 81,000 jobs.
The rise in UK exports to the accession countries is proof, if any were needed, that the expansion of the Single Market has brought positive results. Between 1995 and 2005 exports to the newer member states rose by 150 per cent. Despite that, UK business is still under-represented in accession countries and while these emerging markets may be feeling the pressure from the economic downturn, they still offer huge opportunities for export sales, services, investment and joint ventures which the UK is well placed to take advantage of.
Significant EU funding is available for business development and for R&D projects in accession states and advice on how to access it is available not only through the BCC but also from our extensive UKTI network of trade advisers in London and in European Embassies.
In tough economic times it’s more important than ever to think creatively and seek out new opportunities, but businesses also need an environment in which they can operate with confidence. This is what the European Union is set up to provide: support for creativity and innovation and an increasingly outward looking approach to today’s challenges, alongside the reliable framework of the world’s largest Single Market.
