Make Europe work!
BERLIN/PARIS/ANKARA/WASHINGTON (Own report) - In a catalogue of recommendations ("Make Europe work!") for the upcoming German EU Council Presidency, the Federation of German Industries (BDI) is demanding, that Brussels concentrate its financial planning on the interests of core-European enterprises and the reduction of subsidies for the poverty stricken regions on the borders of the EU. As one reads in the recommendations, the "misconceived" EU agricultural policy has to be corrected and the EU's eastward expansion should proceed "with as few complications as possible." Among the BDI's declared goals is the protection of Germany's leading economic role in East, and Southeast Europe. At the same time, the BDI is demanding that conditions be improved for German businesses in the global competition with the USA, Japan and China. These plans, that Brussels is expected to carry out unobstructed, are in direct contradiction to important French interests. If these demands are met, the intra-European balance of power will shift in favor of German hegemony.
Redistribution
As the BDI writes in its "recommendations" for the German EU council presidency (the first half of 2007) the EU must improve its position in the global competition. The paper maintains, "whereas the USA and leading Asian economies are developing at a rapid pace, the EU is moving too slowly" and the BDI demands a redistribution in favor of industrial capacity ("rapidly making industry relevant programs operational").[1] Brussels should invest EU financial resources more efficiently, including for the qualification of suitable workers ("education") and for the development of technologically advanced products in private industry ("research"). According to the present planning, of the 50 billion Euros earmarked by the EU from 2007 to 2013 for "research and development", approximately 32 billion Euros are already directed toward cooperation between companies and research institutes. The BDI is also demanding the simplification of the rules governing direct "involvement of companies in support programs." In addition, it demands that the implementation of the EU framework program is geared toward "developments in industry's research strategy". The recommendations aim at a rising subsidization of major industrial corporations in the western EU core states under German leadership.
Less Redistribution
To finance its demands, the BDI proposes reductions in Brussels' non-industrial subsidies ("less redistribution"). Financial assistance to poorer regions should, therefore be drastically reduced and "must be concentrated much more clearly on the poorest regions and on fewer support priorities." Furthermore the agricultural policy should to be "reformed". This would particularly affect France. From the 43.5 billion Euros, which Brussels spent in 2004 on agricultural subsidies, nearly 9.5 billion Euros were allotted to French enterprises. Agricultural enterprises in Spain also received important subsidies (more than 6.3 billion Euros) and - based on the population rate - Ireland (more than 1.8 billion Euros). German farmers had to content themselves with approximately 6 billion Euros. During its EU Council Presidency, Germany should advance "the debate on structural reform of EU finances" demands the BDI. The intended reductions in agricultural spending are less an expression of French-German agricultural competition. They are aimed at facilitating the support of large industrial corporations.
Outstanding position
According to the BDI, in order to resume discussions between the EU and the South American Economic Community Mercosur on a free-trade agreement, corrections of the "misconceived protectionist EU agricultural policy" are also necessary.[2] Two years ago, the Mercosur states (at that time Brazil, Argentina, Uruguay and Paraguay) had suspended negotiations on the facilitation of customs regulations, because - due to French objections - they were being denied better access to the EU agricultural market. Paris would like to protect its agricultural enterprises against annoying competition from South America. The BDI is, of course, aware of this, but the central lobby of the German export industry is demanding the resumption of the free-trade negations "as rapidly as possible": "Particularly in Brazil, German industry is in an excellent strategic position. With an EU/Mercosur agreement, this could be consolidated and extended" to the disadvantage of their French and Italian rivals, whose position in the Mercosur states, is comparatively weak.
260 Percent
The influence of French (and Italian) enterprises on EU Member and prospective member states, in East and Southeast Europe is also lagging behind. "Germany often occupies a leading business position in the new EU Member States and the EU accession countries", writes the BDI. German enterprises in fact dominate and, only in a few cases, (like in Croatia, Albania and Romania) rank behind the Italian competition or must bow to Russian industrial influence (in Serbia and Latvia). As the BDI notifies, during the EU expansion phase (1993 to 2004), the volume of German exports to East and Southeast Europe increased by approx. 260 percent, to reach a trade volume of 130 billion Euros in 2005.
Enlargement
In this context, "the Export-oriented, German industry has an interest in a further deepening of economic relations with the new EU countries, as well as, with the accession candidates" writes the BDI, and, as a next step, desires the membership of Bulgaria and Romania "with as few complications as possible". The demand to augment the subsidies to the core-European industry does not counteract EU expansion: Bulgaria and Romania, which make up only six per cent of the EU's total population, will receive only approximately four percent of the Brussels budgetary appropriations. "Enlargement" and "consolidation" of the EU, seem to be synonyms for a galloping expansion of German economic influence.
Integrate
The BDI, in its recommendations for the German EU Council Presidency, has its eye also on other countries that are privileged through German export policy. Turkey (whose most significant business partner is Germany) should be integrated "into the European economic area (EEA) as rapidly as possible."[3] This foray explains the background of the German Policy towards Turkey, oscillating between the perception of substantial economic interests and security policy misgivings. The BDI further demands, that Brussels improve access of European companies to markets in the People's Republic of China and India (Germany is China's European business partner N° 1, and India's N° 2). The BDI demands that all states, bordering on the EU, undertake "structural reforms including deregulation and privatization": "German business has a strong interest in further exploiting the economic potential of relations with all neighboring countries."
Highest priority
But the BDI concedes: the "further deepening of the transatlantic economic integration" must be given "highest political priority". In other words: commercial tensions in the rivalry over the largest expansion segment on the global market have to be eased. The USA is currently Germany's most significant non-EU business partner, and because of its influence on the international market, cannot be circumvented by German business.
[1] sämtliche Zitate aus: Europa machen! Für Wachstum. Für Beschäftigung. Deutsche EU-Ratspräsidentschaft 2007. BDI-Empfehlungen zur Vorbereitung der Agenda, Juli 2007
[2] see also Deutschland schmiedet Bündnis gegen "französische Agrarinteressen" and Absatz- und Beschaffungsmarkt
[3] see also Original Lacoste
