By Vincent Van Quickenborne - 10th August 2010
“We need to do more to unleash the economic potential of our citizens and enterprises”
Vincent Van Quickenborne
Europe is slowly emerging from its worst economic crisis since the1930s. European nations have responded swiftly and adequately to softenthe immediate impact of the crisis, mostly through the use of the“automatic stabilisers” that are part of the fabric of the Europeansocial model.
However, the crisis has laid bare morefundamental flaws in the European social and institutional constructthat will take more time to address. Looking at it from an optimisticpoint of view, the crisis could create the sense of urgency and impetusfor reform that has been lacking in the European project since thelaunch of the infamous Lisbon agenda.
Take our labour market,for example. Although there are large disparities between countries,overall labour market participation is too low to support expansiveEuropean welfare systems, especially in view of the rapidly ageingpopulation. Moreover, the increase in unemployment as a result of thecrisis appears more tenacious than originally thought.
For thetime being, most European nations are experiencing or entering a periodof ‘jobless recovery’. This is because economic growth numbers (currentand projected) are insufficient to generate the number of extra jobsneeded. While lacklustre economic growth has been a feature of Europefor some time now, it is no longer shrugged off as an acceptableby-product of the choice for a distinct social model.
A broadconsensus has emerged that we need to do more to unleash the economicpotential of our citizens and enterprises, by addressing the rigiditiesin our labour market, reforming our pension systems and, above all, byeliminating the barriers to growth. Fortunately, we know what must bedone. As Mario Monti has outlined in his recent report, the deepeningof the EU internal market can create opportunities for more SMEs tooffer their products and services to a market of 450 million consumers.
Aspecific priority in that sense is the elimination of barriers to asingle digital market. The recently released digital agenda for Europeby commissioner Neelie Kroes can pave the way for a smarter and moresustainable economy, in line with national digital plans released invarious member states. Working smarter also requires more focus oninnovation.
During the Belgian EU council presidency, we willaim to achieve a long-awaited consensus on the EU patent, a reform thatwould yield immediate and tangible benefits to the many SMEs that aredeveloping new products and services. To address these socio-economicchallenges we must also have the proper institutional framework.
Acommon market, with (for some) a common currency, cannot functionwithout an economic government. National budgets should be monitoredclosely and appropriate sanctions imposed for those member states thatfall out of line.
European solidarity amongst member statesrequires appropriate burden sharing. You cannot ask for a prudentfamily that works and saves hard to help out in case of financialdistress of a neighbouring family that has adopted a wasteful spendingpattern.
The European commission must be able to keepprofligate governments in check and hold them to account. More centralsteering will also be required to ensure that the EU 2020 strategy doesnot follow the same path as the Lisbon agenda. This means a specific,detailed and phased approach by each member state, and close progressmonitoring by the commission.
Europe has tremendous potential.It can still avoid a destiny as a ‘footnote continent’ if we learn tospeak with one voice, and if we use the crisis as an opportunity forfundamental reform.
