HISTORIC PRESS RELEASE : Advancing long-term prosperity: Economic reform in an enlarged Europe [February 2004]

The press release issued by HM Treasury on 9 February 2004.

Ahead of the 10 February meeting of EU Finance Ministers and the March European Council, the Treasury is today publishing a new report highlighting the need for further and faster economic reform to promote growth, jobs and prosperity in Europe.

Advancing Long-Term Prosperity: Economic Reform in an Enlarged Europe, examines how Europe needs to respond to the challenges of globalisation, enlargement and ageing populations and advises that the problems of low growth and high unemployment will only be solved with greater efficiency, flexibility and productivity.

The Chancellor, Gordon Brown praised the reforms which have been achieved so far, but called for the pace of reform to accelerate:

“In the past four years since the Lisbon Council, the EU has made great steps, with significant reforms in many Member States. However, we still have a long way to go if Europe’s economy is to match that of our major international competitors.

“We have created six million jobs since 1999.  But Europe will still fail to meet its 2005 targets and must create another 21 million jobs to hit its target for 2010.  Productivity in the US is at least 14 per cent higher than in the EU.

“Europe will only solve its problems of low growth and high unemployment by becoming more efficient and increasing productivity – pressing ahead with reforms to increase product, labour and capital market flexibility, and ensuring that its policies are rooted in the realities of global competition and the opportunities it offers.

“Europe must ensure that its policies do not protect and shelter inefficiency, but promote competitiveness, enterprise, innovation and skills. Policies such as those to reduce the burden of regulation, and to reform further the state aid rules and the Common Agricultural Policy, will ensure that Europe secures its place in the modern global economy.”

Detail

The report examines the progress made in economic reform since the March 2000 Lisbon European Council, noting both the EU’s achievements over the past four years, and the scale of the challenge ahead if Europe is to compete effectively in the modern global economy and achieve the Lisbon goals. It calls on Member States and the institutions of Europe to demonstrate a strong commitment to reform, designed to:

• improve the quality of regulation, building on the joint initiative of the next 4 EU Presidencies to simplify existing regulation and ensure that every new regulation is subject to strict tests for its impact on competitiveness;
• strengthen the Single Market, with a more pro-active competition policy, further reform of the state aid rules, and by making the Single Market a reality for services as well as goods;
• deliver more and better jobs, implementing the recommendations of the Employment Taskforce report, with new commitments to improve the functioning of Europe’s labour markets;
• promote enterprise and innovation, building on the recent joint statement of the UK, France and Germany, and with new European Centres of Enterprise – local centres of excellence in enterprise policy;
• ensure an ambitious outcome to world trade negotiations, by improving access to all of Europe’s markets and further reform of the Common Agricultural Policy; and
• strengthen the transatlantic economic relationship, by tackling the barriers to trade and investment between the EU and the US.

The report also calls for a more flexible and adaptable approach to European policy-making, that reflects developments in the global economy and the diversity within Europe itself, advances flexibility and fairness together, and ensures that EU budget expenditure is limited and refocused to support the Union’s priorities, including economic reform. It also calls on the European Commission to nominate a Vice-President with explicit responsibility for overseeing progress in reform.