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Two news items today force us to reflect on the competitiveness of the European economy and European companies. On the one hand, Euroactiv reports that the Czech Republic’s conservative prime minister, Fiala, and other politicians in the country are warning that if Brussels does not give in and maintains — or even expands — its ‘climate ambitions’ and the objectives of the complete decarbonisation of the European economy, the documents published yesterday on the Clean Industry Pact are worthless.
In other words, what European industry needs is not to be ‘clean’ but profitable and productive. Because indeed, as Fiala has indicated, it is not compatible to pursue the 2030 agenda and the Green Deal with increased defence funding and investment.
What we do know, because history proves it, is that innovation and investment in the military industry has very beneficial effects on the civilian industry; whether in the field of maritime transport, aviation, medical research or nuclear energy.
On the other hand, the BBC has published a couple of articles reporting that major shareholders in British Petroleum are asking the company’s management for a change in its investment policies. The shareholders, in the heat of the Common Sense Revolution advocated by the new Trump Administration (departing from the agendas of the Paris Agreement or the World Health Organisation), point out that the objective of any company or commercial organisation is to make money, generate profitability, growth and employment; and not to become an instrument for the execution of the climate policies of governments and international organisations. Which is pure common sense.
In another article, the BBC reports that not only BP but also the other energy giant, Shell, have decided to increase investment in fossil fuels, oil and gas, re-establishing the balance between these energy sources and huge investments in new, more expensive, less profitable energies.
That is what common sense is: not harming shareholders, generating wealth and profitability and moving towards new energies at the pace of research and innovation – as Europe has always done – and not at the pace set by bureaucrats in Brussels or so-called stakeholders, NGOs, pressure groups and international agencies.
Companies must have their own agenda, which cannot be one of impoverishment, degrowth and ruin. A good example. Good news. Let’s hope it lasts.
Since 2005, large North American and European companies have thought that their management, expenditure and investment programmes or their recruitment and human resources policies could, or should, be carried out accepting the guidelines, rules and instructions of governments, international organisations or pressure groups.
For example, the insane employment policies that imposed mandatory quotas on management boards, boards of directors, technical teams or the workforce in general. First, for women. Then, for racial minorities; finally, for the so-called LGBTIQ+ collective (ad infinitum).
This has resulted in increased costs and regulation, as all regulation is in itself a cost for the company; in loss of talent, increased absenteeism and loss of motivation. Profitability falling.
The same has happened with climate regulations that have banned specific fuels or imposed rigorous modifications in production processes that required large investments. And it doesn’t matter if there were subsidies or grants. Along the way, many companies disappear. But, in addition, the subsidy policy forces an increase in taxes or public debt, with which companies have suffered an increasing fiscal pressure that has also caused a loss of real performance for the capitalist entrepreneur and of salaries for the workers.
A defective Keynesian model that has led us to economic collapse and that must be reversed. New politicians with new ideas, and companies doing what they should never have stopped doing. It is the only possible way forward.