Estonian Presidency of the Council of the European Union

The Expectations of the Estonian Employers Confederation ahead of the Estonian Presidency of the EU Council (1 July 31 December 2017)

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EU today and tomorrow

Estonia will take over the Presidency in a situation where the EU and the eurozone economy have mostly recovered from the global economic crisis, where unemployment is low and employment high. At the same time, productivity growth continues to be modest, income inequality has increased and there is an atmosphere of uncertainty created by external factors. The external factors being recent political developments in the US, anti-globalisation and anti-free trade movement, increasing protectionism resulting from the migration crisis and so on. Also, sadly, in the background of the Estonian Presidency, the Brexit negotiations are taking place.

With 500 million consumers, the European single market (with its 4 fundamental freedoms) is the largest in the world. The EU is the greatest trading power and provider of developmental and humanitarian aid. We have the worlds largest research programme Horizon 2020“, for 30 years Erasmus+has supported the learning mobility of young people, the Schengen system allows visa free travel to 26 Member States, 21 Member States use the single currency of euro and so on – all this demonstrates the EU’s ability to work together over the last 60 years. But this is not the time to rest on our laurels, as our ageing population is declining and the importance and economic power of Europe on the world stage is declining with it.

The Estonian Employers hope that the recent election results in Holland and France have given the citizens, business people and politicians of the EU a better understanding of the benefits of the EU membership and that the ongoing debate about the future of the EU will promote this further.

The EU must continue to reform to boost its competitiveness, to ensure sustainability and more inclusive economic growth and employment, which are all prerequisites to improving the social welfare of the EU citizens. We must invest more in innovation and in improving the quality of education and training as this is the only way to equip people with the skills (incl. digital skills) that the market requires and improve their employment prospects in the labour market, as well as advance the global competitiveness of our companies.

The motto of the Estonian Presidency is “Unity Through Balance” and, indeed, finding the right balance in the EU, especially between its ambitions for the economic development and the social agenda, is crucial. When setting its environmental goals, the EU should also place more importance on the need to ensure the EU’s competitiveness. We can only expect success at a global level if the EU acts and speaks as one.

The Estonian Presidency will focus on developing a Europe with an open and innovative economy, a safe and protected Europe, a digital Europe with free movement of data and a Europe that is inclusive and sustainable.

 

The priorities of the Estonian Presidency:

An open and innovative European economy

An open and innovative European economy means developing a business environment, which supports knowledge-based growth and competitiveness. For this purpose, we will focus on:

  • protecting and promoting the EU’s four freedoms – free movement of goods, persons, services and capital
  • making sure that providing services and starting a business in the EU is as easy as possible, and advancing trade negotiations
  • creating new funding opportunities for companies and ensuring a stable banking sector
  • establishing a stable and well-functioning electricity market and empowering consumers
  • ensuring fair competition by preventing tax

The Estonian Employers’ Confederation supports the creation of an open and innovative European economy. The planning of EU legislation must take into account that a stable and predictable business environment is a precondition for investments. Starting a business must be quick and easy. It takes about 20 minutes to register a company in Estonia. With the help of our virtual e-residency foreign nationals can also make use of this opportunity to register a business in Estonia (i.e. in the EU single market) and manage it from wherever by using Estonia’s electronic services. We wish to see more of these smart e-solutions (public e-services) being introduced in the governing and management practices of the EU to make its processes more transparent, quicker and easier.

We must understand that the economic wellbeing of the EU citizens is directly linked to the economic growth and employment, which in turn depend on business, investments and our competitiveness. In addition to realising the full potential of the EU single market, the EU economy also needs new growth opportunities through better access to foreign markets. For these reasons, the European Commission must progress with free trade agreements and create such growth opportunities for our EU enterprises.

To improve the EU’s competitiveness on a global level, more investments are required in innovation and in developing citizens skills (incl digital skills). Both the EU manufacturing industry and its small-scale enterprises must focus more on the automation/digitalisation of their production and services. And, we need competent labour for all this.

The free movement of goods, services, people and capital is absolutely fundamental to the proper functioning of the EU single market and improved competitiveness. The EU must avoid initiatives that curb economic competitiveness. Such as, for example, the amendments to the Directive on the Posting of Workers, which, in reality, restrict the free movement of services in the single market and jeopardise jobs in enterprises that export services. Having cheaper labour than the older Member States of the EU, this amendment would result in increased prices and reduced competitiveness of our country. Who would suffer most from it are workers whose services would no longer be in demand in Western Europe as well as enterprises that export services.

Instead of amending/revision of the Directive on the Posting of Workers we should focus on implementation of the enforcement directive and improve the cooperation between relevant Member States’ authorities.

Due to the characteristics of the Estonian corporation tax system, we do not support the introduction of the CCTB (common corporate tax base) or the CCCTB (common consolidated corporate tax base).

A safe and secure Europe

Only by acting together and preserving its unity on the global stage can the EU keep its citizens safe and promote peace, prosperity and stability. For this purpose, we will focus on:

  • strengthening the fight against terrorism and organised crime, strengthening the internal security as well as the protection of the EU’s external borders by improving cooperation and using cutting-edge information systems
  • continuing the work tackling the migration crisis and reforming the Common European Asylum System
  • supporting and strengthening relations with Eastern partnership countries
  • an increase in defence expenditure, developing European defence cooperation and the EU-NATO

A digital Europe and the free flow of data

Europe must exploit the benefits of technological progress that is bringing continuous change to citizens, businesses and governments. For this purpose, we will focus on:

  • developing cross-border e-commerce and e-services for the benefit of consumers, producers and businesses
  • ensuring modern and secure electronic communications available everywhere across Europe as well as creating a favourable environment for new innovative services
  • advancing cross-border digital public services to facilitate everyday life

Digital action plan and free movement of data are the most important areas for the Estonian entrepreneurs during the Estonian Presidency.

Estonia is a leading country in the EU in developing e-government and public e-services. Our entrepreneurs and citizens know well how much time and money it can save and how it can make the interaction between the state and its people much easier and more transparent. Estonian citizens greatly appreciate e-voting, electronic income declaration, digital prescriptions and e-school, which facilitates the exchange of information between the school and parents etc. At the same time, E-Tax, E-Customs and so on offer significant time savings for businesses.

If the EU wants to benefit from technological advances, it has to make the digital single market work, which means that the free and secure cross-border movement of data within the EU has to become a reality. The free movement of data must come with guaranteed data protection. We need a debate on who has what rights on data (who has access rights, who is the data owner/co-owner). Unreasonable data location restrictions must be abolished. More efforts should also be directed towards cybersecurity and cooperation, including international cooperation in digital matters.

The EU has a long way to go in developing cross-border e-commerce and e-services directed at consumers, producers and businesses.

A good example of cross-border data exchange is the Estonian-Finnish cooperation project on linking national information systems through the X-Road, which benefits the citizens and businesses of both countries by speeding up certain services. The X-Road, which is reputedly the backbone of the Estonian e-state, is an information exchange layer that enables databases and registers to communicated with each other safely and within certain authorities. Approximately 1 000 Estonian institutions use the X-Road to exchange data.

The taxation of the sharing economy must be done cleverly without stifling innovation. Estonia would like to make a contribution to this matter and has requested an explanatory opinion on the taxation of the sharing economy from the EESC (European Economic and Social Committee).

An inclusive and sustainable Europe

An inclusive and sustainable Europe supports equal opportunities for high quality education, employment, access to services and development of skills. A sustainable Europe cares about and is committed to achieving a cleaner environment. For this purpose, we will focus on:

  • modernising rules in order to promote labour mobility and free movement of persons
  • ensuring equal opportunities in the labour market and social inclusion
  • securing a more sustainable environment.

The Estonian Employers believe that it’s important to find the right balance between the EU’s economic, social and environmental goals. Regrettably, there are some worrying proposals in the European Pillar of Social Rights that would not help boost the EUs competitiveness (moving towards a single minimum wage and interfering with areas that until now have been in the competence of Member States and social partners (minimum wage agreements) or been covered by the EU social partners framework agreements (EU social partners framework agreement on parental leave)).

The digitalisation of production/services, the advance of the sharing economy and the rapid change of classic employment relations all necessitate the updating of the EU social policy but it should certainly not be done through increasing social rights. The EU is globally known for its high social standards and spending but not so much for its economic competitiveness. The EU social sphere is already regulated by some 70 directives that set the minimum standards for social matters. There is no need for further social regulations. The focus should instead shift to lowering the cost of labour to help maintain jobs and create new jobs, as, surely, having a job is the best social guarantee. The Pillar of Social Rights does, however, include also many important areas, such as promoting skills, education and lifelong learning and modernisation and sustainable financing of social insurance and pension systems.

Technology is changing the way we work. People can benefit from this change only if they possess necessary skills. It’s especially important to develop digital skills as they have become essential for both work and social life and for remaining active. It is a worrying fact that despite the increased demand for digital skills only half (50%) of the EU residents have basic digital skills and about 20% lack any kind of basic digital skills. There is also a lot of wasteful use of the human resource in the EU: 30% of young people work in jobs that do not match their training, i.e. they are over-qualified. At the same time, 40% of employers struggle to find employees with necessary skills.

 

Important matters for us during the Presidency:

Open and innovative European Union economy:

  • The right balance between the EU’s economic and social goals
  • The free movement of goods, services, people and capital is fundamental to the proper functioning of the EU single market and greater competitiveness
  • Improving the business environment (stable, predictable business environment, quick and simple procedure across the EU for starting a company, well-functioning cross-border public e-services). Smart and innovation-friendly legal framework and taxation
  • Flexible employment relations: work-life balance including promoting teleworking and part-time working
  • Lowering the taxes on labour
  • Creating expansion and growth opportunities for EU entrepreneurs through free trade agreements

Digital EU and free movement of data

  • EU digital single market and free movement of data, abolishing unreasonable data location restrictions, strengthening cooperation in cybersecurity and digital matters
  • Digitalisation of entrepreneurship (including industry)

Improving the quality of education and training by aligning it with the requirements of the labour market:

  • Continued modernisation of higher education (internationalisation and matching the current and future requirements of the labour market)
  • Promoting vocational education, practical training and apprenticeships. Lifelong learning, upskilling and reskilling must become a norm!
  • Developing digital literacy
  • Monitoring the career progress of graduates
  • Strengthening of cooperation between businesses and universities and increasing the financing of research and development activities, incl. simplification of research funding application processes.

 

Major events during the Estonian Presidency:

9 June                        Umbrella organisation of French employers, MEDEF (Movement of the Enterprises of France) visits Tallinn

11-13 June               The Confederation of German Employers’ Associations (BDA) visits Tallinn

15-16 June               The President of the European Economic and Social Committee (EESC) visits Tallinn and the EESC’s session held in Tallinn

17-19 June                The Federation of Austrian Industries (IV) visits Tallinn

28 June                      Mr Markus Beyrer, Director General, BusinessEurope visits Tallinn

13-14 September    Conference “Future of Work: Making it e-Easy”

14 September          BusinessEurope’s Tax Policy Working Group in Tallinn

18 September          The Confederation of Finnish Industries (EK) visits Tallinn

18 October               Tripartite Social Summit (TSS) in Brussels

23– 24 October      Confederation of Swedish Enterprise´ (SN) Brussels Office visits Tallinn

24 October              ManuFuture conference in Tallinn, delegation of the European Economic and Social Committee’s (EESC) Employers’ Group attending

25 October              Seminar by the European Economic and Social Committee’s (EESC) Employers’ Group on “Advantages of Digital Society“ in Tallinn

9-10 November       Conference on digital transport in Tallinn

27-29 November     ESF Committee in Tallinn

29 November         BusinessEurope’s member federations’ representatives in Brussels meeting in Tallinn

30 November – 1 December     

BusinessEurope Council of Presidents meeting in Tallinn

See also:

The official website of the Estonian Presidency: https://www.eu2017.ee/

Estonian Presidency priorities of the Confederation of European Business (BUSINESSEUROPE)

Contact: Eve Päärendson, Director of International Relations eve.paarendson@employers.ee

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