Sunday, 6 February 2011

why do british companies not borrow from Europe? Should the UK be like Norway? and other questions

Weekly view from Brussels

This week was a “mini-plenary” which means we have a selection of committee meetings, group meetings and then on Wednesday and Thursday some debates and votes. So it can be quite busy.

Outside the public meetings I met with new representatives of the CBI in Brussels. We have been working quite closely with the CBI over the past year when looking at the impact of new rules on financial services on the wider economy. Their new boss John Cridland has said they will keep the UK government “on their toes” when it comes to decisions that could affect growth. One of the questions I would like them to help answer is why so few British businesses take advantage of loans from the European Investment Bank. These loans are meant to be one of the ways to help innovative businesses Looking at a recent presentation I saw that of the E6.3 billion loans issued between 2007 and 2009 nearly a quarter had gone to German borrowers, 14.3% to Spain, Sweden 10.3% but the was UK down at 8.4%. Lending to businesses has been a big concern since the financial crisis and the European Commission suggesting large increases in EIB loan availability. I want to understand why companies in the UK don’t seem to apply for them - are they too expensive, poorly administered, poorly advertised?. I’m also writing to my local chambers of commerce across the East of England to ask their members’ thoughts.

I had a long discussion with Statoil the Norwegian Oil company regarding Offshore Oil drilling. The European Commission has said they are considering new legislation in offshore Oil production - this is an interesting situation for Norway who are not in the EU, they implement EU rules but have no votes on the legislation. They have more offshore oil production than the 27 members of the European Union put together. We talked about the safety regime that has been established in Norway to prevent spills and how the industry is working to be better prepared to cope with them should they occur as well as the discussions they have on safety and environmental issues with countries outside the EU like Russia. I hope to hear more from the Norwegian authorities in the weeks ahead. I have also invited Statoil to a public hearing I will organise in the European Parliament next month.

Along with the other 5 MEPs who are leading the scrutiny of the “economic governance” package we had various meetings with the European Central Bank, the European commission, social partners - including business, unions and voluntary sector representatives as well as a rather full press briefing. One journalist asked if we had any “red-lines” which is an interesting question as to be honest there are still may fluid issues which will be debated in months to come. My “red-line” though remains to ensure that there is a sensible and practical distinction between those in the Eurozone and those outside - if countries outside the Eurozone wish to “opt-in” to higher levels of scrutiny and the potential fining mechanism that should be permitted. But fines designed to protect Eurozone stability should not be imposed on those who are not in the zone. The ECB was quite interesting on to this issue as well - pointing out that issues such as “macro economic imbalances” are sensitive in all countries but even more so in areas where there is a common currency.

Back in the region last night I joined representatives from the Bio-science research community. We had a long discussion about the issues accessing EU funding for research, last year I worked with the European parliament on a paper suggesting 71 different ways of simplifying the process and cutting red tape but so far the commission has announced action on just 3.

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