conclusions

A P U B L I C A T I O N O F T H E 7 T H E U R O P E A N E C O N O M I C C O N G R E S S

20-22 APRIL 2015KATOWICE

conclusionsFOR EUROPE

INVESTMENTSINNOVATIONSENERGY

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M A I N S U B J E C T A R E A S

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Europe needs a breakthrough

More freedom in the economy and in the market, more courage while investing, as well as in innovations

and during expansion, but also common security and

deepening of integration in order to make the most of

common strengths: The 7th European Economic Congress

has indicated the ways of thinking about the future of

Europe.

A n innovative leap that Europe should take so as not to lose in the global race for competitiveness. More free market and harmonisation of law, and fewer in-dividual interests. Attractiveness for investors, ener-

gy security, expansion and partnership cooperation in new mar-kets. Conclusions of this year’s 7th European Economic Congress do not bring ready-made recipes because this is not what open debates are supposed to bring. However, a synthesis of the three days of debates brings a message for Europe which is contend-ing with internal problems and searching for a new develop-ment formula in an unstable and dynamically changing world.

The new post-crisis reality, which is not at all easier, makes us verify clichés or euro-delusions. The hand of no country, nor any move on the part of the administration in Brussels, could solve economic problems in a miraculously simple way and push Europe out of stagnation. Public investments will not propel the wheels of the European economic machinery which turn too slowly.

It is necessary to convince private investors that Europe is an attractive place to invest in – these are the fundamental observations that even the very first debates of the Congress have brought. High-ranking representatives of the EU admin-istration called upon the representatives of business to pro-vide the EU institutions with information on how they should modify and regulate the EU market in order to support invest-ments. The voice of business, investors and practitioners in the economy is so important because “Brussels does not al-ways know what the situation really looks like”.

Too low level of innovation is a common problem for the entire Europe. There will be no breakthrough without the

The most important part of the Juncker’s Plan includes deepening

and harmonisation of the EU internal market.

Europe needs a breakthrough

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regulatory barriers being removed, without tax incentives, without an efficient system of supporting novelty, creative and effective elements of the economy.

By using its traditional strengths and investing in trust and partnership, Europe has to look for its new opportunities be-yond its borders, that is in the new, dynamic markets, such as Africa and Asia.

Investments in Europe. Finance, regulations and growth

Three hundred billion euro is supposed to revive investments which are so much needed in Europe and drive the growth. Until recently, this was just an idea arousing unhidden controversy, but now it has begun to take a tangible form. As it was reserved with caution during the Congress, it is a whole another matter whether the mechanism being constructed will work in the way we would like it to…

The European Fund for Strategic Investments will have a capital base of EUR 21 billion at its disposal, which is to provoke EUR 315 billion worth of investments between 2015 and 2017.

It is expected that outlays of the value of EUR 240 billion as part of this amount will be allocated to strategic sectors (transport, energy and information and telecommunications infrastructure, as well as research and development) and EUR 75 billion will be given the sector of small and medium-sized enterprises.

But it is not the money that constitutes the major problem and challenge for European politicians and investors.

Too much emphasis is put on the amount of funds as part of the Juncker’s Plan and too little attention is paid to the qual-ity of particular proposals. Not only do the projects for the Juncker’s Plan need to be good from the point of view of the European Union as a whole instead of only from the perspective of the interest of particular Member States, but also they have to trigger the interest of private equity. Participants in the Con-gress were sceptical about the quality of projects which have been submitted so far (that is until April 2015).

The key mechanism and tool of the Plan is to be effective improvement of the regulatory environment, which will be noticeable for entrepreneurs and will create better conditions for investments in the European Union. The point is elimina-tion of barriers that undermine the achievement of investment undertakings.

The plan provides for legislative actions that cover reforms in the energy sector, creation of the Digital Single Market, a re-form of the services and products market, the building of a capi-tal market union, changes in the area of transport or support for scientific research and innovations.

The subject area related to the dynamic investments in Eu-rope comes into close relations with such topics of the Congress as the changes in the EU which serve to increase the level of integration and cohesion of the Community, an increase in in-novation of the European economy, or reindustrialisation.

Energy, climate and industry. Three-in-one

None of these topics can be discussed separately – in isolation from other contexts – such a thesis proposed to the partici-pants in the debates on the energy industry, climate policy and

the idea of industrialisation has been clearly confirmed during the Congress.

Not only does the cooperation between the countries of the European Union in the field of the energy industry increase the energy security of the Community, but it is also an important step in the struggle for climate protection. The common energy market is an obvious impetus to the development of a modern energy industry – more environmentally friendly and better satisfying the demand for safe and available energy.

Achieving the goals of the climate policy will not be possible without the use of new technologies; moreover, the climate pol-icy may become a stimulus for innovation in the energy industry.

The EU energy policy cannot be reduced only to the dimen-sion related to CO2 emissions and their impact on industrial production. The new energy industry, modern industry in gen-eral and climate protection should strengthen one another.

Reindustrialisation – an idea, the implementation of which does not go the way it was assumed to go, should be low-car-bon and competitive. This direction has been confirmed by the EU Heads of State (recently in March 2015).

However, there is a threat to the restoration of industry and, speaking in broader terms, to the competitiveness of Europe, due to the high energy prices resulting, to a large extent, from the cli-mate and fiscal policies. As the representatives of the large-scale industrial business argued during the Congress, it is the politicians who will decide whether the products of particular industries will be manufactured in Europe or in other parts of the world.

There is too much extortion and too few incentives in the energy policy pursued by Brussels; it should take into better account the specific character of the economies of various countries, their resources and geographical conditions. Due to a different starting point than it was the case with the countries of the “old European Union”, the objectives of the energy and climate policy in the new Member States of the EU should be accompanied by effective compensation mechanisms.

Another key issue to the energy security of the EU is the construction of cross-border gas and

electricity interconnections.

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The EU energy policy should also take into consideration the events taking place beyond its borders, such as the conflict in Ukraine. In this context, it is extremely important to build inter-national electricity and gas interconnections.

The development of cross-border interconnections is usually associated with such keywords as the integration of national energy markets in the EU and the creation of a common energy market. However, the emergence of the common market still remains very far due to various reasons, including national reg-ulations still being very diverse – there is a lack of harmonised rules of support for renewable sources and the use of broadly defined public aid.

The European Union will remain a world leader in the fight against climate change, which does not change the fact that it is only responsible for approx. 11 per cent of the global CO2 emis-sions. What is important is to conduct the fight with climate change, which is global, after all, on a global scale – by consen-sus. If, however, these actions would lead in practice to a loss of competitiveness and economic stagnation, it will be extremely hard to win the societies and decision-makers over to them.

Europe, being exposed to the risks related to political insta-bility, is aiming at energy security which, just as it is the case with climate protection and reindustrialisation, is has to learn to speak about with one voice of the Community. An example of such European cooperation and communication will be the new legal framework concerning the gas market in the EU, which are to strengthen the solidarity of the Member States, especially in emergency situations.

Innovation in the economy. A time of taking actions

The lack of innovation is a pan-European problem, regardless of the actual level of innovation in the economies of particular Member States. In spite of the fact that many European enter-prises are ranked among the best in terms of innovation, Eu-rope has no reasons for being satisfied – many undertakings are

being moved to a more innovation-friendly business environ-ment, such as the United States. As a result, the Old Continent loses its importance on the global economic map.

The main reasons for this are problems with the financing of innovative activity, over-regulation of the economy and an aversion to taking risks among the entrepreneurs, which is closely related to these two factors.

During several debates on various aspects of innovation, doubt was cast on the thesis that entrepreneurs are more in-clined to take risks when they operate in countries deemed as more innovative. If some innovative projects are not imple-mented in Europe, this simply means that entrepreneurs do not have suitable conditions for the implementation of their goals. This is why it is necessary to eliminate all barriers to innovation in the Member States.

Innovative undertakings generate multi-billion profits, but they are and will remain considerably more risky than stand-ard business activity. Acceptance for risk in this field is a key challenge not only for the entrepreneurs, but also for state ad-ministration which has to take this risk into consideration, for instance when clearing EU funds, as well as in the actions taken by tax and customs officials.

Rejection motivated by reluctance to take risks is a common response to innovative proposals and projects that are sup-posed to utilise public funds. Paradoxically, the very same re-jecting entities are the source of complaints about the low level of innovation in Europe. Including calculated and mitigated risk in the actions taken by the administration appears to be a par-ticularly tough challenge.

It is crucial to allocate the funds to research and development via industry. This increases the chances of their profitable implementation.

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In the context of pro-innovative changes in the law, the Pol-ish bill on support for innovation, containing such initiatives as tax allowances for research and development, has received rec-ognition. It was emphasised that such mechanisms work well in the USA.

Changes in the financing of research and development in-troduced in the new EU financial framework that has just be-gan raise hopes that innovative technologies will flourish. It is crucial to allocate the funds to research and development pro-jects via industry, as it increases the chances of their profitable implementation.

The stage of a European debate on the general assumptions of the European pro-innovative policy is now behind us. The time has now come to take actions and apply specific solutions, which will prove difficult if Europe (scientists, business and ad-ministration) fails to understand that innovations are more than just research and development and new inventions. First of all, it is their commercialisation – their implementation to mass production, delivery to the market and, finally, profit which is the goal of every single business activity.

Poland, which ranks poorly against other European countries in terms of innovation, is an example of a country at the stage of transformations – in the process of maturing to innovation. The success the Polish economy has had so far has taken place without a considerable contribution on the part of innovations and entrepreneurs deemed such activity burdened with exces-sive risk. However, without innovations further development is impossible.

Nevertheless, there is and there will be no recipe for creating an innovative enterprise – the debates of the Congress have also been unable to come up with a universal recipe in this re-gard. The cases presented during the debates have proved that the likelihood of success depends on the particular industry, market environment and size of the entity. However, innova-tion has to be somehow “built into the DNA of an enterprise”; it is not enough to implement an idea or complete a single pro-gramme – the entirety of an enterprise’s activity, management philosophy and mentality of the staff has to be subordinate to innovation.

The state and the economy

In times of crisis and as a result of painful experiences, acqui-escence or even expectation for the state’s intervention in the economy appears. On the other hand, it is known that it is eco-nomic freedom that brings wealth to nations. The current or expected role of the state in the economy, as well as in creat-ing the growth or stabilising the situation in Europe threatened with stagnation, was one of the main subject areas of this year’s Congress.

The elementary experience of the significance of economic freedom and private ownership for development is shared be-tween the European countries that have undergone political transformation. However, their attitudes as to the role of the state in the economy vary.

The example of Poland proves that the countries that were more consistent in heading towards economic freedom and the

rule of law have achieved better results in terms of economic growth. However, it is not so that past success guarantees fu-ture achievements. Without a higher dose of reforms, Poland and other Central European countries will permanently slow down their economic growth.

Both the state and the enterprises stand (or should be stand-ing) “on the same side of the barricade” in terms of economic growth. Here, however, the experiences differ as well. In many European countries, business considers the state as more of a threat than an entity to cooperate with.

As a leader in the economy, the state hampers its operation, which can be illustrated with the example of a private enter-prise competing with a state-owned enterprise that operates based on different criteria and has different objectives. The state can be detrimental to the economy not only in playing the role of an economic actor – privileged on the one hand, and burdened and encumbered with political duties on the other – but also in regulating the economy too vigorously without being able to foresee the economic consequences of the legal solutions and norms being introduced.

During the Congress, a general recommendation was being formulated (rightful in theory inasmuch as difficult in its day-to-day application), namely that we should have as much mar-ket and as much freedom as possible and only as much state intervention as needed. An agreement of this type constitutes the basis for a policy that works well in Germany, for instance.

The problem the highly developed European economies are experiencing is too high a level and scope of subsidies for the private sector. The actions of the state should be aimed to a greater extent at combining entrepreneurship and educa-tion in order to stimulate creativity and not to kill the spirit of entrepreneurship.

Social expectations as to the role of the state in the post-cri-sis economic landscape of Europe, which must not be neglected in the current situation, should take into consideration not only the objectives of the economic policy, but its tools as well. Temporary intervention in particular industries, protectionism onerous to the European market and economic exchanges, or acting as an owner in enterprises are certainly more “invasive” methods than transparent actions of an active regulator subject to stricter control.

However, it must not be forgotten that in times of instability the state faces challenges related to the socialisation of eco-nomic and investment risk – it is sometimes the condition for growth in the case of fields that are particularly exposed to risks and political risk.

Integration, cohesion and infrastructure

Without a coherent electricity and gas transmission system, as well as without road and rail transport, the European Union loses its competitiveness. The new framework of the EU budget creates possibilities for further integration of the European infrastructure. Investing in spatial and functional cohesion of Europe is a reachable and practical dimension of integration, as well as a potential source of advantages and the driving force behind prosperity.

However, we will not manage to achieve a higher degree of integration and cohesion, nor better quality of the common market in Europe, without new cross-border interconnections in the fields of energy, road and rail network, and telecommuni-cations. Without cross-border infrastructure interconnections, the countries of the European Union will not be able to make

A debate on the balance between the private sector and market freedom will always remain

a political debate.

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best use of the advantages that the Community has to offer. Consolidation of the internal market is a huge challenge for the European Union as a whole.

There is so much work left to be done in the field of aligning the transport in Europe. In the case of roads, this concerns such aspects as the introduction of a uniform toll collection system, whereas in the case of railways it involves smoothing out the differences related to different track gauge, as well as with the safety and traction systems.

The potential importance of the so-called North-South Cor-ridor grows in the context of the current unstable international situation related to the conflict in the east of Europe, for in-stance. The corridor would thus become a catalyst for economic growth. It would create permanent links between Central Eu-rope and Western Europe as well as increase the level of energy security in the region. New and more efficient transport and telecommunications interconnections would increase the com-petitiveness of the entire EU.

Both implemented and planned investments in the European gas transmission network should gradually translate into more and more market prices of the blue fuel for the countries of Cen-tral Europe and the Baltic States.

The idea of the Energy Union and a common European ener-gy market has been present during the debates of the Congress for years; in fact, the Congress has anticipated the European interest in this topic.

This year, particular attention has been paid to the fact that without practical implementation of the technical and infra-structure-oriented dimension of the Energy Union, there will be no possibility of exchanging energy resources. As it has been advocated by the representatives of the Baltic States, an ideal solution would be an energy link between all countries of the EU, spanning from Helsinki to Lisbon.

However, it is not only security that determines the excep-tional importance of cross-system interconnections. Owing to

interconnectors, it is possible to create uniform national energy markets and avoid disturbances – uncontrolled and undesirable phenomena from the point of view of the operation of energy systems.

As it was advocated during one of the debates, the EU should be an energy market for all and not for just some selected ones. This is to be supported by a coherent regulatory environment for all enterprises. It is not enough to build interconnectors – we need to know how to put them to the right use.

Europe in the global economy Expansion and cooperation

Export is not enough. Entering foreign markets – which in-volves investments and mergers – is what increasingly be-comes a prerequisite to further development of an enterprise. Europe in the post-crisis difficulty forms a too narrow market for many ambitious, but not necessarily huge enterprises. More often than not, entering the expansion to foreign markets into an enterprise’s strategy, even if it involves distant markets at times, becomes a business necessity.

Nevertheless, many enterprises do not take internationali-sation into account in their development plans. Stereotypical thinking, closing itself in one’s own surroundings and a lack of faith in one’s own competence constitute barriers to entering global markets. This has to be changed.

Europe has maintained many of its advantages that prove attractive in the economic relations with other regions of the world, including African countries. Apart from high-qual-ity technology and products, Europe quite frequently offers

Without cross-border infrastructure interconnections, the countries of the European Union will not be able to make best use of the advantages that the Community has to offer.

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partnership cooperation. It is possible to build long-lasting re-lations on this foundation.

The African continent, being located relatively close and ap-pearing incredibly promising in terms of the pace of its develop-ment and the resultant possibilities of economic engagement on the part of European business, has remained in the field of interest of the participants of several editions of the European Economic Congress to date.

Africa and Europe will remain neighbours. Both continents share common history and they should also have common future.

Africa is a billion-people market and an abundance of natural resources. More than half of the most rapidly developing econo-mies of the world are located on this continent. In recent years,

Africa has developed at an average yearly pace of over 5 per cent and consumption expenditure has been increasing there at a pace of 4 per cent a year – everything seems to indicate that this trend is likely to continue in the future. The forecasts are indicating that owing to such a dynamic development Africa will become a continent with 300 million middle-class consum-ers over the next 10 years.

The potential for cooperation between African countries and Central Europe is great, but there is still a lack of breakthrough.

What is most important for African economies is invest-ments, especially direct investments. From this point of view, it should be noted that the level of foreign investments made by European entities, particularly when we take the financial crisis into account, has undergone a positive evolution. It is worth remembering that the time of simple trade is ending. Soon those who will not be able to invest will also be unable to buy and sell.

The involvement of larger European entities in Africa is on the rise –they are showing the way for smaller enterprises. Mu-tual support in new markets is equally important as reliable information and communication.

The stage of blazing the trails in the relations between Central European countries is now definitely over. A stage of common projects and investments in the human capital and entrepreneurship has come. The African countries are open to inheriting all experience and know-how from the European countries. As it has been emphasised, the experience gained by the countries of Central and Eastern Europe may prove especially valuable because they have undergone deep po-litical and economic transformation and are able to share their unique knowledge with the African countries which are on the threshold or in the middle of equally dynamic transformations.

Investors wishing to enter the African markets look for se-curity and stabilisation in the countries they wish to invest in. Relying on popular media reports may give a distorted picture of the African continent. The space and practice of communica-tion between Europe and Africa still leave a lot to be desired. The living memory of the stereotypes related to the colonial past on both sides is a stumbling block to agreement which is necessary to begin cooperation.

The countries of Central and Eastern Europe may enjoy an obvious advantage in this regard because they do not have a

similarly negative connotation in Africa. On the contrary, it is nothing unusual that members of the establishment of African countries were educated in the countries of this region in Eu-rope in the past – their good relations with such countries as Poland is a capital worth paying attention to.

Before making any investment decision concerning Africa, it is essential to conduct a precise analysis – the diversity of the continent which is being wrongly treated as a homogene-ous whole in Europe is huge and easily discernible, for instance with the case of the domination of the Republic of South Africa and Nigeria in the overall structure of expenses in the Sub-Saharan Africa. Investors counting on the economies of scale and mass customer should observe these very national mar-kets with particular attention.

By actively and effectively participating in the economic growth of Africa, China offers a simple trade: infrastructure and access to cheap goods in exchange for raw materials. How-ever, America and Europe send a different message to Africa: “restructure and put an end to corruption – then we will help you”. What can be noticed in this context is how significant the differences between value systems are for economic coopera-tion. It has been reminded on the forum of the Congress that the inhabitants of Africa do not absolutise profits in their fi-nancial form; for them, it is religion, family and interpersonal relations that count and social development is understood as the interest of the community or even the joy of life or… music.

Among the values that Europe could give to the African coun-tries without imposing anything or any sense of superiority in-clude the approach to business partners which is in line with the European culture that highly appreciates such issues as morality and respect for other human being and the results of their work.

China and the relations between Europe and this huge econ-omy have been the subject of debates not only in the context of Africa, but also in the face of a new chapter in the economic relations between China and the world. This is to be served by such initiatives as the creation of the so-called New Silk Road. Logistics is increasingly becoming an element that determines entering into cooperation between such distant regions of the world as Europe and China.

The European Union remains China’s main trading partner, but Central and Eastern Europe has begun to pop into the Chi-nese consciousness as a separate and important investment di-rection. China opens up to cooperation with this region, while paying more and more attention to internal development at the same time. Cooperation and mutual support of European enterprises may be a precondition for success in the Chinese market. It is also important to have innovative products to which the Chinese market is particularly open at present.

As part of the Congress, a meeting of the China – Countries of Central and Eastern Europe Business Council took place. The aim of this initiative is to stimulate economic cooperation in the field of mutual investments, trade and technological co-operation, as well as to strive to balance economic exchanges between the members of the council.

Europe – USA. Transatlantic hopes and concerns

It is not necessary to persuade anyone of the challenges and potential benefits that the Transatlantic Trade and Investment Partnership (TTIP) agreement may bring for our continent and for Poland.

This significance of this agreement reaches much further than just economic issues. This is a treaty with a geopolitical

Logistics is increasingly becoming an element that determines entering into cooperation

between such distant regions of the world as Europe and China

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dimension which makes it possible to drop anchor for trans-atlantic cooperation for good. However, both Europe and the United States have a limited opening time for the negotiation “window”. Both parties are threatened either by signing an agreement limited to trade liberalisation exclusively, which would distort its original assumptions and which certain indus-trial groups (e.g. the automotive sector) do not agree with, or by postponing further negotiations for indefinite time.

There are quite a number of risks for the treaty – this also the case because the most difficult issues have not been raised yet. Paradoxically, however, the consequences of failing to sign the treaty may result in more potentially painful consequences for the economy than signing it.

The subject matter of the transatlantic agreement speaks volumes about Europe and the European economy. It is all too clear that a reform of Community regulations is necessary, along with their adjustment to the market requirements of the global economy. In order for the TTIP to prove beneficial to the European Union, the EU not only needs hardball negotiations with the Americans, but also a change in the way of thinking about regulations that block the competitiveness of the Euro-pean industry.

An analysis by the European Council on Foreign Relations (ECFR) indicates that positive results of the treaty will not in fact be equally positive for both parties; moreover, they may also involve different European countries at different scales. This is why the EU should also consider taking special protec-tion measures for certain sectors so that they have the time to become competitive with regard to American goods.

The energy sector and the energy-intensive industries in Central Europe have to accurately calculate the pros and cons of this agreement. Nevertheless, the problem of energy price differences between the EU and the USA has an impact on the overriding objective outlined by the European Union, namely reindustrialisation and the increase of the share of industry in the EU GDP by an average of 20 per cent.

One of the sectors most vulnerable to the competition from American products is the chemical industry. The process of pro-duction lines escaping to the Unites States can be prevented owing to such initiatives as introducing an additional item to the negotiations, which would ensure the export of American gas to Europe.

The successful completion of the negotiations would also be significant for keeping the attention of American business on Europe – this is so because there is a “competitor” to the TTIP in the form of a free trade agreement involving 11 countries in the Pacific region, which is being negotiated in parallel.

Young Europeans. The unused energy

Not only is the unemployment among the young people a po-litical problem throughout Europe, but it is also a situation in which maintaining Europe’s unity is at stake. In the case of the economies of the south of Europe, which are going through se-rious problems, there is a growing frustration among the young people who are unable to find a job in spite of having comple-ted their education, which translates into anti-European atti-tudes and putting the sense of the existence of the European Community as a whole into question.

This year’s European Economic Congress has attempted to confront these problems through a new project styled “EEC – Leaders of Tomorrow”. The project is aimed at creating a spa-ce that would integrate the future leaders of economic and

political life into the European debate, intensify the participa-tion of young people in public life and promote active citizen-ship. One of the elements of the project were meetings of the young people with politicians and experts, as well as lectures given by business practitioners; moreover, there was also a pos-sibility for the students of European institutions of higher edu-cation of taking part in the debates as panellists. Another part of the project were also sessions on young people’s views on the future of Europe, the development of start-ups and young entrepreneurship, and the European labour market.

The EU is striving to reduce youth unemployment through such initiatives as “Youth Guarantees” – a programme that sup-ports young people in the labour market (which forms part of the Youth Employment Pact developed by the European Com-mission). However, not all countries have decided to participate in the programme due to such issues as the fear of not being able to meet the difficult requirements set by the European Commission; other countries doubt that the investments re-lated to the subsidies to create jobs could take effect. In the case of some states, it takes very long to prepare for their par-ticipation in the programme, whereas for other countries the amounts in question are too small to make a change of the cur-rent system worthwhile.

It has been stressed during the debates that too little em-phasis is put on the employers’ expectations in the actions tak-en by the EU administration. Employment support programmes should “go through enterprises” because it is them that create jobs. On the other hand, entrepreneurs should formulate their current and future expectations clearly (even with a reservation that the market may verify them afterwards) and they also need to communicate with the labour market, as well as cooperate with the system of education. However, positive scenarios of this type are still less frequent than manifestation of dissatis-faction with insufficient or inadequate qualifications of young people.

Nowadays, it is important to be open to changes. A contem-porary businessman is a navigator who sails on rough seas, but flexibility, energy and willingness to confront new challenges should also be required from young employees, politicians and labour market officials.

The expectations of young people and the requirements of business must go hand in hand. Spain breaks all the records in terms of unemployment, but this is not because young peo-ple in Spain have stopped learning or are unwilling to work. Spanish enterprises are being closed and those that manage to stay on the market do not invest. This phenomenon shapes the labour markets in many countries of the EU – without pro-investment stimuli there will be no new jobs.

It is necessary to launch a package of actions that will un-leash the unused energy of young people. Young entrepre-neurs need appropriate institutions and efficient tools that would offer them support. Such global giants as Google or Facebook also benefited from such help at the beginning of their activity.

Another step to make with the future of young Europeans in mind is to provide a closer link and cooperation between the in-stitutions of higher education and the industry. The presence of entrepreneurship in education and science that recognises the importance of living relations with business would provide a real opportunity to integrate well-educated young people who think in terms of innovation into the increasingly demanding labour market.

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Bronisław KomorowskiPresident of the Republic of Poland

‘Not only is the Polish economy formal-ly part of the economy of the European Union, but it also constitutes its incre-asingly significant component – the economic development of our country is essential to overcoming the crisis in Europe.

Here, in Europe, we need to keep transforming the traditional economy into the knowledge-based economy. For Poland, it means utilising the powers of the best ever educated generation of young Poles. It is our great development potential.

Reindustrialisation based on innova-tions is an opportunity to accelerate the development of Europe as a whole. In-deed, it is impossible to compete solely on low labour costs, and compete we must. It should also be noted that there are too many barriers to the develop-ment of innovation in our reality. No allowances have appeared in the Polish tax system so far which would encour-age people to pursue innovation.

Although we are not starting from scratch, there is still much for us to do. Polish institutions of higher education need to open to scientists from abroad – they need to become centres of crea-tivity, thus benchmarking against the best practice.’

Jyrki KatainenVice-President of the EC, European Commissioner for Jobs, Growth, In-vestment and Competitiveness

‘The European Commission is aiming at an increase in private investments, which is to be helped by such initiatives as the Juncker’s Plan. We look at invest-ments in Europe in the long term – we talk here about the amount of EUR 300 billion. The plan comprises three main parts, among which the most important one includes deepening and harmonisa-tion of the EU internal market. This year, Commissioner Elżbieta Bieńkowska is to present the strategy for the develop-ment of the EU free market.

Another objective is energy security in the EU and the Energy Union. Europe needs more interconnections, especially with regard to gas, because many coun-tries still have to depend on just one supplier. The last objective is to conduct a capital market reform so as to improve access to financing. This goal is to be served by the European Fund for Strate-gic Investments, which will focus on the support for both private investments and other types of investments that will be implemented as part of the public-private partnership formula.

The European Commission focuses on structural funds that will harmonise the market and help the private sector to invest in Europe. Moreover, they will also help to finance risky projects. We need to remember that it is the entre-preneurs who change the market.’

Elżbieta BieńkowskaEuropean Commissioner for Internal Market, Industry, Entrepreneurship and SMEs

‘We all focus on money and every coun-try of the European Union believes to have the best projects to be financed. However, we often forget that these projects need to be good not only from the point of view of particular EU Mem-ber States, but also from the point of view of the European Union as a whole. Moreover, they also need to trigger the interest of private equity.

Every country has regulations that protect its internal market, but we need to realise that such practices weaken the European Union as a whole because it is the common market that consti-tutes the core European value. Europe! If you fail to understand that the com-mon 500-million market is our greatest asset, you will enter the road to defeat and lose your competitiveness. [ . . . ]

Neither administration nor bureaucra-cy create jobs. It is the entrepreneurs who should show us the direction in which the regulations need to be changed in order to make the free market more open and let investments develop. It is not true that Brussels always knows better.’

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Jerzy BuzekMember of the European Parliament, Chairman of the Programme Board of the European Economic Congress

‘During the previous editions of the Congress, we discussed the energy in-dustry, innovations and the need for opening up Europe to China and Africa, and now to India as well. We talked about the need to give the European economy a new impetus to develop-ment and, ultimately, we also discussed the issue of reindustrialisation which is required for Europe. Recently, we have debated the trade agreement between Europe and the USA. This is a situation we should be well prepared for if all the parties involved are to benefit from it. These topics are just as relevant today as they were before, but one new ele-ment has been added, namely if we wish to move the economy forward, we have to increase investments. It is a common European challenge to leave behind the stagnation which can be more danger-ous than the crisis at times because it can last for a decade or even longer. We strive to achieve a growth of 3–5 per cent instead of one and a half or even just half a per cent, as it is currently the case in Europe.

There are two roads. The first one is increasing the amount of money in the European financial system and the sec-ond one is increasing the level of invest-ments because today they are at a level lower by 20 per cent than that of the time before the crisis. This is a huge difference and the situation needs to be improved. In the opinion of economists, the amount of money in circulation in Europe is suf-ficient, but it is the lack of optimism that constitutes a problem. The task ahead of European institutions is to increase the level of economic confidence.’

Carlos MoedasEuropean Commissioner for Research, Science and Innovation

‘The European Fund for Strategic Inve-stments will increase our possibilities of financing innovative projects and can be a key tool for supporting innovation after 2020. The fund will help us remove one of the barriers that impede invest-ments in innovations today, namely the aversion to taking risks.

At present, Europe suffers from the lack of investments. It is a result of uncertainty concerning economic pros-pects, which is otherwise a perfectly understandable phenomenon, taking into account the worst economic crisis for years we have emerged from recent-ly. Therefore, it can hardly be expected that investments in innovative solu-tions, which are more risky by their very nature, will become popular. Uncertain-ty is only one factor. Another one is the significantly worse financial situation of many European enterprises. The finan-cial crisis entailed cutting of research and development budgets, which com-plicated the situation even more.

If we do not do something in Europe, if some projects are not implemented, this simply means that entrepreneurs do not have suitable conditions for the im-plementation of their goals. We simply have to reduce the barriers to innova-tion in EU Member States and it is the duty of the European Commission to persuade them to do so.

I am saddened to look at young Eu-ropeans who say they have had to leave Europe in order to implement their in-novative projects. We have to deal with both regulatory barriers and barriers to financing, which currently prevent us from achieving our goals.

Janusz PiechocińskiDeputy Prime Minister and Minister of Economy, Poland

‘The European Union is still divided by borders and split into particular indus-tries, and protectionist tendencies have surfaced in many countries of the Euro-pean Community, especially in the face of the economic crisis. As of today, the areas of crucial importance include pub-lic procurement and further refining of its criteria. Moreover, particular priority should be given to releasing the poten-tial of young entrepreneurs.’

Vitali KlitschkoMayor of Kiev

‘Poland’s success in the implementation of reforms is the best motivation for the citizens of Ukraine. As a country, we wish to follow the same path, striving for economic development and stabili-sation in order to become, like Poland, a rightful member of the European family.’

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W n i o s k i d l a E u r o p y 2 0 1 5

Janusz Lewandowskiformer European Commissioner, Chairman of the Polish Prime Minister’s Economic Council

‘There is too little investment in Europe today to ensure an appropriate rate of economic growth and revive the labour market – despite the fact that the capi-tal necessary for these investments is available. The problem is that although there is money, there seems to be an aversion to taking risks.’

Markku MarkkulaPresident of the European Committee of Regions (CoR)

‘We need investments that would be implemented using cutting-edge tech-nologies which take on the risk of pio-neering a given field. It is necessary to motivate European regions in order to ensure “bottom-up” support for these initiatives. The aim of doing so is to ensure that the planned investments work to the best effect for particular regions. The invest-ment potential must translate into the everyday lives of EU citizens. In order to achieve this, it is necessary to utilise local resources, include small projects and project clusters in the investment scheme, and innovatively combine vari-ous elements, such as modern start-ups, and more traditional ones, such as infra-structure projects.’

Wojciech DąbrowskiChairman of the Board, Polska Grupa Zbrojeniowa SA

‘In Poland – just as it is the case in many other countries – it is the arms industry that may play the role of one of the innovation leaders. We have assumed close cooperation between the army, science and industry. We have professio-nalised army, changes such as commer-cialisation have taken place in science and the defence industry has also been consolidated, which makes it possible to allocate funds to the most important undertakings instead of duplicating cer-tain actions.

We invited approx. 200 private-owned enterprises to cooperate with us and we are discussing the ways in which we could help one another. We acquire technologies from these enterprises, while simultaneously giving them ac-cess to the market on our part.’

Władysław Kosiniak-KamyszMinister of Labour and Social Policy, Poland

‘Unemployment among young people is not only a problem related to a particular workplace or to starting a family. It is a political problem for Europe as a whole, which concerns the issue of maintaining its unity. In Spain and Italy, there is a growing frustration towards the entire European Community. In spite of having completed their education, young people are unable to find employment, which translates into anti-European attitudes.’

Klaus Dieter RennertChief Executive for EMEA and CIS, Hitachi Ltd

‘We, as Europe, do not tolerate mistakes and this is why our attitude towards in-novations is less positive. It is true that little is happening in Europe in terms of combining high-risk capital and start--ups. We have to examine the challen-ges that particular societies are facing. In developing countries, such as China, there are different challenges than that of Japan, for instance. [ . . . ]

Apart from a road to innovation which is specific to a given country, it is also worth thinking about the broader context of this process. Germany fo-cuses not only on innovation, but also on health care. If a given programme is to be successful, it is important that the society understands what we are planning to do. However, regardless of the model of innovation a given coun-try chooses, it cannot keep itself aloof in this race. Innovation is not just one of many strategic options. It is a global imperative.’

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Leszek BalcerowiczPolish economist, co-creator of Polish economic transformation, Chairman of the Council of the Civil Develop-ment Forum Foundation (FOR)

‘The countries that were more con-sistent in heading towards economic freedom and the rule of law have achie-ved better results in terms of economic growth, and this growth is strictly ne-cessary for poor societies.

Poland has more than doubled the size of its economy. However, it is never so that past success guarantees fu-ture success. The thing is that without a higher dose of reforms, Poland will permanently slow down its economic growth. Most importantly, we did not waste our time and we managed to in-troduce economic freedom and compe-tition on a broad front. There is no com-petition in a small and medium-sized country without foreign competition.

In every political system, state own-ership means that entrepreneurs are controlled by politicians, which is de-structive to economic freedom. Nothing can take the place of competition in the economy.’

Jan KulczykChairman of the Supervisory Board, Kulczyk Investments; Founder, CEED Institute

‘Entrepreneurs are being accused of wi-shing to have political influence. They sho-uld not have it. However, more often than not it is the state that crosses the border in economic areas, while frequently not ha-ving sufficient competence to do so. [ . . . ]

The objective of a private entrepre-neur is not only profit, but also long-standing development, sometimes over many generations. By contrast, in the case of state enterprises, just as in poli-tics, there are terms of office and the de-velopment horizon is shortened to the period of four years.’

Adam PurwinChairman of the Board, PKP Cargo SA

‘Operators and logisticians need to follow the needs of their customers, many of whom operate on a regional scale, but part of whom also operate on a global scale. In such cases, it is essential to operate in the categories of transport corridors.

New transport corridors have emerged in the form of both sea routes (such as the one between the Baltic Sea and the Adri-atic Sea) and land routes, and they still continue to do so. Freight trains from cen-tral China have already begun to reach Poland within 14 days; it will not be long before we construct the largest dry land port for operating such trains.’

Josef JanningSenior Policy Fellow, ECFR

‘It is the European countries offering competitive goods marketable in the United States (and currently being una-ble to achieve the competitive level due to such issues as customs duties or costly market entry procedures) that are likely to gain the most benefit (from the TTIP agreement – editor’s note). By contrast, the countries which offer the same goods as the United States are exporting may lose because there will be competition for the market.

This is why the EU should also con-sider taking special protection measures for certain sectors so that they have the time to become competitive with regard to American goods.’ [ . . . ]

If the agreement is signed, the Chi-nese will not necessarily take the pro-posed trade standards into account. However, if no agreement is reached, the Chinese will fastidiously take ad-vantage of such reality.’

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Ivan HodačChairman of the Board, Member of the Board of Directors, Aspen Institute Prague, former Secretary--General of the European Automobile Manufacturers’ Association (ACEA) between 2001–2013

‘The automotive industry calls for such initiatives as comprehensive and ambi-tious negotiations on the cooperation in matters related to setting standards. If there are no standards, the American business will head towards Asia.

Our industry wants a comprehensive agreement, that is one that includes the main issues we call for and not just trade liberalisation and elimination of customs duties. Not only will it distort the mean-ing of the document and the provisions we agree on, but it will also postpone the completion of other regulations for indefinite time. Thus, we should sign the comprehensive TTIP agreement right now; otherwise, we will fail.

Horst KöhlerPresident of the Federal Republic of Germany between 2004–2010, Ger-man economist

‘There is no ideal model for all coun-tries. Every country has to find its own balance between economic freedom, private ownership and state’s interven-tion. However, it is important to stick to a clear rule which says that in case we have any doubts as to the presence of the state in the economy, we should al-ways take the side of market freedom.’

Nkosazana Clarice Dlamini-ZumaChairperson, African Union Com-mission

‘Until recently, Africa was referred to as a continent of despair. For over ten years, however, it has become one of the most dynamically developing regions of the world. It is a place of great opportu-nities and a continent of the future due to its young population and the emer-ging middle class.

Forecasts indicate that such a dy-namic development fosters an increase in demand and that, over the course of the next decade, Africa will become a continent with 300 million middle-class consumers, which means it will be on the same footing as Europe today.

However, we do not wish to be just an output market for various goods or a place from where natural resources are acquired. We wish to be a place of a high level of industrialisation and well-developed services. We wish to diversify the economy and shift towards industries that are able to derive higher added value from the use of those natural resources.

Among many needs of Africa, it is worth noting the necessity of developing the potential for energy production in order to address the needs of the coun-tries where energy demand is growing in relation to the development of industry. However, it should be an energy mix based on renewable sources to a greater extent, which requires investments and technologies. Africa also needs to build energy corridors modelled after the one organised by the countries of the eastern and southern regions of the continent.

Herbert WirthChairman of the Board, KGHM Polska Miedź

‘Trust is the foundation of long-term business, regardless of which part of the world we examine, because it is trust that determines whether a business will be long-term and stable. [ . . . ]

At the same time, we are on the thresh-old of a certain breakthrough. Much is being said about innovation which is necessary in order to stay ahead of the competition, but let us examine whether we cause erosion of typical jobs by pur-suing innovation. I have my doubts about that because in many cases innovation is a one-sided game – a rush that does not take the social dimension into account.’

Mark CliffeChief Economist, ING Group

‘A growing dynamics of export that exce-eds the amount of the GDP can be seen in several European countries. This is due to the fact that they expand both the range of products they offer and their output markets. This group of countries includes Germany, the Netherlands, Poland and Hungary. [ . . . ] While planning foreign expansion, one should not do so with only distant markets in mind. The point is also doing well in close markets. For Poland, the major market is and will be Germany, but Polish enterprises can also focus on cooperation and development of the supply chain within the region.

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Mankeur NdiayeMinister of Foreign Affairs, Senegal

‘Today, Africa needs something more from Europe than just goods. We all have to admit that what is most important for the economy is investments, especially direct investments. From this point of view, it should be noted that the level of foreign investments, particularly when we take the financial crisis into account, has undergone a positive evolution. We are satisfied that it is possible to notice such a dramatic increase in the invest-ments made by European enterprises.’

Charles M. KitwangaDeputy Minister of Energy and Minerals, Tanzania

‘Tanzania has a whole range of natural re-sources and minerals and our experience and knowledge in this field make it possi-ble for us to extract them. However, if 30 per cent of all minerals come from Africa, just as it is the case with 60 per cent of gold extracted globally, a question arises why it does not contribute to a faster eco-nomic growth of African countries. [ . . . ]

We are experienced in the extraction of minerals and the majority of enter-prises are competent to do so, but we lack commercial experience, such as the one related to the issue of financing or law and trade issues. We lack the people with whom we could discuss the development possibilities present in our country.’

Marek WoszczykChairman of the Board, PGE Polska Grupa Energetyczna SA

‘The starting point in which the imple-mentation of the objectives of the ener-gy and climate policy began was diffe-rent in the 15 countries of the “old” EU compared to that of the new EU Member States. This is why it is important for the new Member States, including Poland, to have compensation mechanisms so as to allow us to adapt to the costs and transformations at an appropriate pace. It is necessary to take into consideration the specific character of the individual countries of the EU, as well as their reso-urces and geographical conditions. [ . . . ]

Eighty per cent of the power that the renewable energy industry has at its disposal has been built by power engi-neering corporations. If, then, we would like to view them as a whole instead of looking through the lens of the conven-tional energy industry alone, it becomes evident that they strive to adapt to the reality created by regulations.

The energy market does not so much undergo a transformation on its own as it does so as a result of the obvious technological advancement; although this change is being stimulated by regu-lations, it shows that energy companies are adapting in this regard as well, with-out any prejudices against one technol-ogy or another, and they can also opti-mise their investment portfolios with profitability in mind.

.

Bohdana HoráčkováChairman of the Board, CEO, CEZ Polska

‘Since 2010, the amount of approx. CZK 150 billion has already been spent on the support for renewable energy sour-ces in the Czech Republic. In 15 years, large part of these installations will be technologically obsolete. As a matter of comparison, the cost of a single nuclear unit amounts to approx. CZK 100 billion, but its lifespan is approx. 60 years.’

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revolution.’

Surojit GhoshMember of the Board, ArcelorMittal Poland

‘The steel sector is an important ele-ment of industry – steel is needed eve-rywhere. However, the steel industry in the EU is experiencing trouble because electricity prices in Europe are nearly 50 per cent higher than it is the case in the United States, whereas gas prices are hi-gher by approx. 33 per cent. Our clients do not want to pay more only because energy is more expensive in the EU than elsewhere. If someone is able to ma-nufacture steel cheaper than they do it in Europe, the clients will buy it there. It is the politicians who are to decide whether steel will be manufactured in Europe or somewhere else in the world.

We often hear that reindustrialisation is very important for the EU, but we also have the impression that these are just empty words and no action. We can see the contradiction between those decla-rations and the EU climate policy.

Both EU and national decision-mak-ers should listen more to the voice of business. European industry needs safe, available and affordable energy, just as the rest of the world does.’

Rokas MasiulisMinister of Energy, Lithuania

‘The EU does much to increase the sha-re of renewable energy and reduce CO2 emissions. A fresh and modern approach to the energy industry – yes, but first we should take care of its foundations.

We hear so much about emission costs, for instance, but here, in Lithuania, the first question that crosses our minds is this: Is energy available at all? It comes as no surprise that the most expensive en-ergy is the one you lack when consumers need it. Lithuania is perhaps one of the countries most vulnerable to energy risk.’

Włodzimierz Karpiński,Minister of Treasury, 04.2013-06.2015, Poland

‘Polish energy companies in which the Treasury has shares plan to implement EUR 25 billion worth of investments by 2020 (in the case of electrical power en-gineering, the majority of them remain at the level of corporate approvals). We are fortunate in being unaffected by the fashion of shifting the area of economic activity from industry towards services.

Today, investments in industry in general and in the energy industry in particular in Poland are being imple-mented in accordance with the highest technological standards, albeit under pressure of high risk related to the EU climate policy. Over the past 25 years, Poland and Lithuania have reoriented their industries. Today, taking the en-ergy industry as an example, one could say there is an ongoing technological

Marcin KorolecSecretary of State, Ministry of the Environment, Polish Government Plenipotentiary for Climate Policy

‘According to the forecasts, by 2030, almost three times more money will be spent globally on investments in rene-wable energy sources than on invest-ments based on fossil fuels. [ . . . ]

Around 2025, we will have more an-swers concerning the sources of energy that the energy industry will be based on. Today, the market says it will be RES, but the problem is that these are unsta-ble and subsidised sources. It is technol-ogy that will determine the future.’

Heinz SchernikauCEO, HMS Bergbau AG

‘We believe that the global coal market will grow. The European views on coal production are highly controversial. [ . . . ] In Germany, we pursue a failed coal po-licy. Energy production is subsidised in an inappropriate manner and the socie-ty has to participate in these subsidies.

We invest in Poland, where the con-ditions for investments are good. The production costs will be the determin-ing factor. The Silesia coal mine oper-ates seven days a week, which gives it an advantage over the competitors that operate five days a week. The Orzesze area will enable efficient and cheap ex-traction of coal. If it proved unprofitable, we would not invest in it.

Miguel Arias CañeteEuropean Commissioner for Climate Action and Energy

‘From the point of view of the Energy Union, the most important task is to modernise the energy market in the Eu-ropean Union because we are still overly reliant on supplies of energy resources from outside the EU.

We have to look for new ways to mod-ernise the European energy industry which will become depleted to a considerable extent over the next twenty years. We es-timate that investment in the order of at least EUR 1 trillion will be needed for the modernisation of this industry in Europe.

The role of a closer cross-border coop-eration and construction of interconnec-tors that would enable energy transmis-sion between individual countries of the EU is also extremely important. We have to overcome the physical fragmentation of national energy markets in the EU.If we manage to succeed in integrating our markets efficiently, it should con-tribute to lowering energy prices in the EU; high energy prices compared to oth-er regions of the world are undoubtedly the most serious problem of that sector in the countries of the EU today.’

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Dominique RistoriDirector-General of Directorate-Ge-neral Energy, European Commission

‘The EU energy policy cannot be redu-ced to the sole dimension of industry and CO2 emissions. Reindustrialisation should be low-carbon and competitive, whereas energy, industry and climate should strengthen one another. It is possible to pursue the energy policy, ta-king into account all the above aspects, for they drive one another. However, we should also pursue it with the energy consumers in mind.’

Dariusz LuberaChairman of the Board, Tauron Polska Energia SA

‘The energy and climate package incre-ases the cost of functioning of the eco-nomy through the rising prices of CO2 and their growing volume, which re-sults in an increase in electricity prices. Apart from that, the increase in energy prices is also influenced by the support systems intended for various energy sources.’

Paweł OlechnowiczChairman of the Board, CEO, Grupa Lotos S.A. (Lotos Group)

‘Until 2014, the main objective of the EU energy policy was striving towards reduction in CO2 emissions. Then, some important events having an influence on the energy policy took place, as a result of which we perceive Russia in a different manner today and the Europe-an Union has adopted the assumptions of the Energy Union. [ . . . ]

An important element that integrates the European Union and increases its energy security is the development of infrastructure, such as cross-border oil and gas pipelines, power lines and railways.’

László SzabóDeputy Minister of Foreign Affairs and Trade, Hungary

‘We need to see the issue from a broader perspective, thus including the countries outside the EU in the picture, in order to ensure that the European Community is connected with the outside world in an appropriate manner. We need infra-structure and energy interconnectors because the energy price in the EU is twice the US price and something has to be done with it if the European economy is to stand a chance of competing in the global market in the future.’


P H O T O C O V E R A G E E U R O P E A N E C O N O M I C C O N G R E S S 2 0 1 5

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An agenda commensurate with the challenges and efficient organisation would not suffice to attract the most prominent politicians and representatives of the big business to Silesia, were it not for their willingness to talk openly, confront the-ir views, learn the opinions of others and, as a result, jointly agree on the direction in which we should be heading and from where turbulent winds blow.

Together with our Guests, we can be proud that we support the idea of European dialogue.

This dialogue has a face of its own – which often tells more than carefully selected words do. The publication presen-ting a selection of the most important conclusions, opinions and recommendations that appeared in the course of over a hundred debates would not be complete without a part that illustrates the process. On the following pages, photojourna-lists will show you the atmosphere and environment in which the intellectual achievements of this year’s edition of the EEC were made possible.

This year, during the 7th edition, there was a particularly lar-ge number of interactions – in the form of lobby talks and exchanges of opinions, as well as new and renewed contacts or just handshakes and exchanges of business cards. This was all possible because the Congress took place under one, spa-cious roof for the first time in its history – at the modern In-ternational Conference Centre in Katowice. This time, it was possible for the Congress life to flourish without hindrance in between the debates and in the evenings, when it was the time for cultural and social events – by using the advantage of the new location. Let us see and recall the course of the Congress…

(off)

The Congress means people and meetings – nothing could be more obvious.

A picture of the dialogue

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WE LOOK FORWARD TO MEETING YOU AGAIN AT THE 8TH EUROPEAN ECONOMIC CONGRESS

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