Single Market

The frustrating Europeanism of family businesses

Smarter regulation and integration could unleash forces beyond imagination

3' min read

3' min read

"Europe has not grasped the seriousness of the situation. It is in a worse position today than it was a year ago. Our growth model is crumbling. Our future is at stake. We must achieve results in months, not years'.

It was an Italian, Mario Draghi, who recently made this brutally honest assessment of European policy. The Italian economy is still showing signs of growth. In the rest of Europe, on the other hand, many companies remain on hold, often discouraged at first sight. The so-called tariff agreement with Donald Trump reinforces this sentiment.

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To be fair, Ursula von der Leyen put cutting red tape at the top of the agenda. The European Commission must promote a huge cultural change. The officials who developed and defended the labyrinthine rules for sustainability reports and supply chains (known by the acronyms CSDD and CSRD, ed.) are now called upon to dismantle the very complexity they helped to create.

The much-vaunted 'omnibus laws' (dedicated to administrative simplification, ed.), which many companies desperately hope will provide relief, still await approval by the European Parliament and the Council. Precisely at this critical moment, the risk of further delays is highest.

This impression was shared by family-run businesses from across Europe at a European Family Business Forum held recently in Brussels. The entrepreneurs showed clear pro-European sentiments, but appeared frustrated at the same time. 'Accelerate! Listen to us! We need growth! Give us a level playing field with our competitors!" This was the message.

Although there is much to criticise about Brussels bureaucracy, family businesses across Europe maintain a fundamentally positive view of the EU both as a market and as a destination for investment.

They are waiting impatiently for the economic area to finally complete what it set out to achieve. Smarter regulation and integration could release forces beyond imagination. Our survey of 2,400 companies in France, Italy, Spain and Germany, some 80 per cent of them family businesses, reveals what needs to be done to release this energy.

In an economic climate marked by geopolitical challenges and the aftermath of recent crises, the business leaders interviewed remain confident that the economy will recover, with a surprising degree of con-sensus across all countries.

66% of respondents expect their companies to be in a better or even much better position five years from now than they are today. 60% consider their home market a good place to invest. And when they consider investing elsewhere, the first countries that come to mind are partners in the EU - only then do they think of the US, China or Switzerland.

However, conditions are associated with this optimism, and the role of the EU institutions themselves is often viewed critically. 66% of respondents believe that the many compliance requirements absorb resources that could otherwise be used for growth. Complicated and constantly changing rules fuel uncertainty. The most pressing challenges for companies remain the shortage of skilled workers and volatile energy prices.

Moreover, the EU must deliver on its promises regarding the four fundamental freedoms (related to goods, services, capital and persons). Almost two-thirds of the surveyed companies say they would gain significant opportunities from a strengthened single market.

Family businesses tend to be particularly resilient and to think in the long term - that is, in generational terms. However, for potential successors at the helm of these enterprises to find the courage to take over from current managers, they must be provided with attractive and reliable conditions.

Managing Director of the Stiftung Familienunternehmen, a Munich-based foundation representing family businesses in Germany

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