EU ‘should cut costs or see businesses flee’

EU ‘should cut costs or see businesses flee’

EU ‘should cut costs or see businesses flee’

The EU must urgently lower energy prices and ease regulations to stop industry fleeing the continent, European businesses said yesterday, as Brussels prepares plans to stimulate the green economy.

The European Union is racing to make Europe more attractive for the companies that could be tempted by massive U.S. and Chinese subsidies and lower energy costs.

This week the European Commission, the EU’s executive arm, will present plans to reform Europe’s electricity market, to boost the green transition and guarantee the supply of critical raw materials.

But BusinessEurope, the EU’s main business lobby group, said Brussels’ efforts were insufficient and too slow.

“The risk of deindustrialization in Europe is real,” warned Markus Beyrer, director general of BusinessEurope.

Many companies are already “partially or totally relocating their production outside Europe”, said BusinessEurope, which represents employers’ associations from 35 countries.

The commission on March 9 loosened state aid rules for companies in sectors that help reduce carbon emissions as part of its response to subsidies offered elsewhere.

BusinessEurope however called for more action including cutting taxes on energy and keeping them low to reduce businesses’ bills.

“Policy-makers should not be fooled by ... declining energy prices,” Beyrer said, adding: “They will remain higher than for our main competitors.”

The business lobby might be expected to demand cost cuts but some real world impact of the problem has already been seen.

German chemical giant BASF said in February it would close several units in Germany because of high energy prices affecting competitivity in Europe.

Beyrer also pointed to tougher regulation as their top problem after high energy prices, according to a recent survey of its members.

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