By Günter Verheugen is European commission vice-president responsible for enterprise and industry - 23rd March 2006
The EU is a haven in the storm of globalisation, argues Günter Verheugen.
Lately it seems that European integration has become the main screen onto which people project fears and uncertainties which in reality stem from quite different causes.
Many people think that integration is to blame for the constant changes we are faced with and the dizzying speed at which these changes are taking place, regarding it as the driving force behind globalisation and not seeing it for what it is: our haven in the storm of globalisation.
New major economic and technological powers such as China and India are emerging. Are we sufficiently prepared for this new world order? We do not want to destroy what we have achieved in terms of social and environmental standards.
Our aim continues to be a high standard of living, and there is only one solution: we must compete on quality. We must always be better than the others. We must make the highest demands on the quality of our products. We must be at the forefront of technology. And we must be the most innovative.
The days of dirigisme – of state control and subsidies – are over. What we need now is a policy at national and European levels that is conducive to competition that offers businesses the conditions under which they can grow, make profits, invest and create jobs most effectively.
The new European industrial policy I have proposed and the new policy for SMEs, are strictly based on these regulatory principles. Politicians do not find people jobs; businesses do. But policies can and should contribute to making sure that businesses can. We want European companies to invest in Europe and create jobs in Europe.
That is the core of the refocused Lisbon strategy, the European partnership for growth and employment. This is now beginning to bear fruit. On the basis of jointly agreed guidelines we now have 25 national reform plans and an EU action plan.
For the first time, we have an economic policy that is coordinated at European level. We cannot expect any quantitative results yet, but the convoy has got under way and is moving in the same direction. 2005 was the year of strategic planning. 2006 must bring the first concrete results.
Our prime aim is to fully exploit the potential of Europe’s internal market. We have the biggest internal market in the world, but it is still not fully developed; the movement of goods and, in particular, services is still hampered by too many national regulations and protectionist practices. We want to eliminate these barriers.
I think that the planned liberalisation of the European market in services is the most important – and probably the most difficult – of the tasks facing us. It is not a question of introducing the freedom to provide services in Europe.
That has been enshrined in the EU Treaties for years. It is rather a matter of making this freedom effective and making use of an enormous potential for growth and employment. There have been vociferous protests against the opening of the market in services.
The European commission will take account of justified criticism. We will ensure that the freedom to provide services will not open the floodgates for social dumping, environmental dumping or quality dumping, but that it will permit competition and thus release economic potential.
Last year, the commission launched its biggest and most wide-ranging initiative to date for cutting red-tape and avoiding overregulation. We want future European legislation to show clear improvements and to ensure that no European regulation will be introduced without a complete analysis of the costs it will entail for the economy.
For the first time, we are screening the entire corpus of European legislation from the point of view of competitiveness. This will lead to appreciably fewer, simpler and better EU regulations. Small and medium-sized enterprises account for the lion’s share of jobs in the EU, and not the multinationals that are household names.
Throughout the EU nowadays, however, SMEs are all suffering from the same problems: insufficient capital, excessively complicated and inappropriate regulations, too little capacity for innovation, inadequate use of modern information and communication technologies and difficulties in gaining access to markets outside their traditional domestic sphere.
I have the impression that SMEs used to be more the subject of fine words than of actual policy. This is about to change.
The new SME policy, which I presented a few months ago, addresses all these issues. And the member states are addressing them too. The commission is putting the “think small first” principle into practice in all the areas for which it is responsible.
The next major task is the transition to a knowledge-based society. The problem here is an alarming gap between ambitions and reality. Everyone knows what we must do, where we must invest more, but not enough is actually happening.
The way things are going, in 2010 we will still be far short of our goal of spending three per cent of GDP on research and development. It is now up to the member states and industry to finally follow up their fine words with real actions.
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