There are dark clouds on the horizon for the global economy. A recent report published by Global Trade Alert and the Centre for Economic Policy Research suggests that international trade is stagnating, as countries put up protectionist barriers and resort to “beggar-thy-neighbour” policies. Some economists predict recession in the UK following the Brexit vote, and the IMF has slashed its growth outlook for the Eurozone economies as well.
But could there be a silver lining? The EU-28 accounted for almost one quarter of global GDP in 2013 and, compared to much of the world, Europe can still boast a highly-educated workforce, good transport links and solid infrastructure, and strong institutions, including courts, watchdogs, ombudsmen, etc. Even without the UK, many Europeans will still enjoy a relatively high quality of life.
Are there also opportunities to improve EU competitiveness? Despite the creation of the single market, there are still barriers to trade in services, and removing them could boost GDP by almost 2%. Could there also be room for additional investment, particularly in terms of diversifying Europe’s energy sources and promoting clean and renewable energy? Would measures such as these be enough to kick-start Europe’s economy?
Curious to know more about competitiveness in the EU? We’ve put together some facts and figures in the infographic below (click for a bigger version).
We had a comment sent in from Alexander, offering suggestions about how to kick-start the EU economy, and make Europe competitive. He believed: “Regulations, high taxes and other location factors must be significantly improved in order to become competitive again.”
To get a reaction, we spoke to Marju Lauristin, an Estonian Member of the European Parliament (MEP), and Vice-Chair of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament. How would she make the EU more globally competitive?
I think there are a couple of important things [to be done]. I will start with the area closest to me, that is: Digital Europe. We all have very, very strong feelings that the digital single market could be very beneficial for Europe, in terms of economic growth, jobs, and increased competitiveness in a globalised world. But to achieve that there is a lot to do, and not only in terms of new technology.
The most important thing is to remove all barriers to innovation. The worst obstacle we face is that we have too many borders inside countries, but also between countries. We have different levels of digital skills, different economic cultures, and also different levels of entrepreneurial skills. To build a digital single market, we need to break down these barriers.
For another perspective, we also spoke to Jean-Pierre Lehmann, Professor of International Political Economy at the International Institute for Management Development (IMD) in Switzerland. What would be his advice to the European Union?
I think one of the things that’s going to be very, very important is for Europe to make sure that it remains globally oriented, has a global mindset, and looks at opportunities on a global basis. There is a risk, in my opinion, that Europe is becoming too inward-looking, too smug, too complacent.
The future does not lie in Europe, the future lies outside of Europe. But the future of Europeans depends on the extent that they are able to seize the opportunities the outside world will offer; and there are lots of opportunities, whether it’s in terms of markets, in terms of technologies, etc. But Europe is not welcoming enough, or hospitable enough to its globally-oriented entrepreneurs, with the result that many leave.
What would make the EU more globally competitive? How can Europe kick-start its economy and seize opportunities around the world? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts for their reactions!
IMAGE CREDITS: CC / Flickr – Rafael Matsunaga
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
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Less taxes, less regulation, more freedom
Closer union
.
The only thing that can make the EU more competitive is to end the EU.
.
The only thing that can make the EU more competitive is to end the EU.
Becoming part of Eurasian Union with Russia.
Becoming part of Eurasian Union with Russia.
I fully agree.
Save it’ s industry from chinese dumping procedure first, then investing in the qualifications of youngster from early stages in productive technologies, fiscal union, lower taxes on tourism
Save it’ s industry from chinese dumping procedure first, then investing in the qualifications of youngster from early stages in productive technologies, fiscal union, lower taxes on tourism
Getting rid of the EU? And especially the unelected worthless EU commission.
Getting rid of the EU? And especially the unelected worthless EU commission.
Good advice 500€ to an authoTess’s account. Why you are in EU if you don’t know it?
Good advice 500€ to an authoTess’s account. Why you are in EU if you don’t know it?
Stick to the knitting.
Stop pretending that the economy will grow for ever!
Stop pretending that you can sell to everyone else…
At the end of the day, the EU has to ask itself – who is buying? Who needs this stuff? And if the EU is not buying, how will the buyers get their money?
The EU cannot pretend to be able to use the same tactics to fix the problem that was created by the same tactics – competitiveness alone only gets you so far and no further.
The EU has to think more than outside the box. It has to think holistically.
Jean-Pierre Lehmann talks some sense
“There is a risk, in my opinion, that Europe is becoming too inward-looking, too smug, too complacent”
The only bit I disagree with is him calling it a “risk” where as in reality the EU has been inward looking, smug and complacent for decades
“The future does not lie in Europe, the future lies outside of Europe.”….and this is exactly why the UK voted to leave
Stop the political path and return to trading process
Demand fair trade only products and high standard regulations, and no agriculture grown in polluted environments to even up other countries “beggar-thy-neighbour” policies. Of course this globalised in trade only world needs global social policies to counter-balance “beggar-thy-neighbour” exploitation policies. However, good luck with that one. Trade is stagnating because the majority of people have no spending money; those working have immense debt and have little spending money. Local businesses die out because few local people have spending money. An unconditional basic income is the solution to all that.
Not being EU for a sart.
Sense and work with the people..never against the people..
Innovation and education.
Preparing the youth for the skills required for the 4th Industrial Revolution☺
Free education in everything and fight against corruption!
Democrasy
Well, first of all, starting to decide what is the best interest for Europe above all no matter and without minding others interests. As the other economic or political blocs are not worried about Europe, well do not be naive.
It is not about only “economical” competitiveness, because economic depends from social and political structures. It is about building new political structures, which can provide efficient public policy in such kind of fields like energy, migration and so on.
Why?
What you should be doing is dropping global productivity and focus on local production and quality of life for the citizens of Europe. You know, those people who pay for your attention.
Globalism is simply a method of impoverishing the citizen in order to provide additional wealth to the rich and powerful
Que opinarian sobre el alcohol como combustible, menos contaminacion a la capa de ozono, menos guerras, menos manipulacion de la economia.
lo mas importante energia renovable.
Political and social integration
Radicial decentralization – not only elimination of political centralization of EU, but also decentralization of nation states.
Only one thing counts and that is forming and educating our youngsters into global citizens with an open mind, skills, courage and compassion. We need to let them learn, travel and work on their passions. We still have the resources to buy them the time, but we need to start investing more in the next generations. A child not educated is a child lost.
The key production factors of an economy are capital, resources, labor, and know-how.
The EU needs to fix its banks (and tighten regulation) to avoid bank crashes and problems with capital supply.
The EU needs to secure cheap energy resources, the relative high cost of energy is a competitive disadvantage.
The EU needs to invest more into education and adult-education/retraining. Too much of the workforce is still underskilled and talent recognition is weak.
The EU also needs to improve innovation and speed up the time to market for new inventions. This is crucial. Some absolutely great inventions/innovations are just sitting around for years before they are turned into marketable products. This is a major waste and a competitive disadvantage.
If you need any advice, you know how to reach me. ;)
25/04/2017 Arlan Brucal, Research Officer at the Grantham Research Institute on Climate Change and the Environment at LSE, has responded to this comment.
25/04/2017 Dr. Jonathan Cobb, Senior Communication Manager at the World Nuclear Association, has responded to this comment.
un-taxing small businesses and labor income to restart a healthy economical ground, and taxing big businesses to stop the money bleeding through multinational tax-escape system. just the opposite of what’s actually going on in fact.
How about becoming a true federation with common pension and wages systems that fund one another? How about ending austerity policies? Perhaps if people got more money then they might spend it.
Focus on your competitive advantages. Do not run after the others trying to win on their play ground. Enhance cultures, respect nature & life, support human centric economy, happy families and sharing of knowledge. Establish Greek value system. The real one. We have much more assets than the others.
An Islamic Europe :))) (Given the IQ of Euroean people)
Taking a look at some comments .. Maybe different way of doing business than the known ! A better game ;)
If EU want to be further compatitive on economic basis, then the society will go down.
.
The solution:
sudo apt-get remove EU
sudo apt-get remove –purge EU
sudo apt-get update
Sudo apt-get install democracy 1.1
@DEBATINGEUROPE
Hi, FTR, it looks like EU-28 trade accounts for c18% of world trade for 2015 and its position is fast declining.
Also, the IMF and CIA factbook already have the EU as the 2nd largest trade bloc by GDP.
When the UK leaves the EU, the EU will almost certainly become the 3rd largest trade bloc, with ASEAN fast catching up.
For the EU to become more competitive will require major changes, many of which ‘Club Med’ countries will find difficult to swallow, for e.g.:
Almost complete abandonment of CAP.
Almost complete abandonment of CFP.
Decentralisation of the EU power in Brussels to other less structurally bonkers centres more reflective of the geography of an EU-28.
Adoption of a common language e.g. English or more likely German.
A reduction in EU civil service numbers – c15% when the UK leaves and a further 25% to enhance competition.
A reduction in MEP numbers – c10% when the UK leaves and a further 25% to enhance competition.
Lower [if not no] taxes for new businesses in new pioneering tech sectors.
A visa-system whereby citizens of poor EU nations receive lower wages than the natives of richer countries wherein they work. For example, someone in Romania or Bulgaria can earn up to 10 times more as a doctor in the UK than in their home country. If they got paid only 5 times as much for working in the UK then they would still be monetarily better off than if they stayed in their home country and too would cut costs for the superior [economically] country within which they now work.
I think the road ahead for the EU is fraught with difficulties.
@ Tarquin- yes, paved with difficulties & tears- not Euros!
However, “Euros” are no hindrance for waltzing Brussels- they have the ECB & 500 mio to squeeze!
Why not remember & compare: The “Congress of Vienna”, the “Concert of Europe”, the Holly Alliance: 1815- 1853…..38 years of “treaties”, talking & waltzing?
EU: 1st Dec 1993- 2016……so far, talking, kissing & partying in Brussels made possible by taxpayers for 23 years now. For how much longer can the EU28 minus UK= EU27 extravaganza be financed?
http://www.diplomacy.edu/resources/general/persuasion-through-negotiation-congress-vienna-1814-1815
Your last point is just beyond anything anyone normal would consider normal. I live in London and may I ask you how is a Bulgarian or Romanian going to be able to live in London if they are paid 5 times less (that would be like 6000 pounds a year) unless you suggest they commute from their home countries. Second, you do realise NHS is going to hire only Bulgarians and Romanians if they are to be paid less. People like you make me want to leave this country (I am already considering a few countries where my qualifications are highly sought after). But really what you just suggested is OUTRAGEOUS! Limiting immigration is one thing but discriminating people is a whole different story. How about people coming from other poorer oversea countries (don’t want to specify in case I offend people) to be paid 20 times less and offered to sleep on the streets in the summer they must be used to it anyway… I still can’t believe you suggested that. Finally, being poor is not A CRIME!
@ Tarquin
@ Tarquin
I am a Bulgarian doctor. None of my colleagues went to the UK after graduation. You would have been lucky if they had because they were fluent in English and you wouldn’t have had to pay for their education. Instead they went to Switzerland and Germany, which is much better pay. You are right we earn less here, but most of us have houses, no mortgage, an average house in the city centre is 40 000 pounds (that is in a big city). I have no debt, two children, my nursery costs 20 pounds a month and I have all my family around. We get constantly companies coming to our hospitals trying to recruit people but nobody wants to go to England, bad weather and attitude and very far from home. There is really no need to pay doctors 10 times less I assure you! Just look at how many bulgarian doctors you have. You soundvery bitter!
@Martin
I recall seeing either a France24 or a Euronews programme recently talking to trainee Bulgar doctors who nearly ALL said that their aim was to get to the UK post-graduation – I prefer to believe said TV news programme rather than you dear doctor.
BTW, Bulgaria is NOT renowned for its education system – NO Bulgarian universities occur in the world’s top 200 best universities. Indeed, I do not believe that a Bulgarian degree is as valued or as prestigious as a UK degree; I am sorry to be so blunt, but that is my opinion and it is supported by fact.
BTW, I reckon the UK has more Bulgarian cleaners than Bulgarian doctors, what sayest thou dear doctor?
@Paula
Of course being poor is NOT a crime, neither is wanting to control (not STOP) immigration into the UK.
Many foreign EU citizens working in the UK do not realise that the sheer numbers involved has caused problems, such as:
Fracturing UK national cohesion.
Overpowering the NHS.
Over-filling schools.
Increasing crime.
Not only that, but many EU foreigners seem to think that they are doing the UK a favour when the UK [outside of the EU] could select from the other bigger pool of people from the 93% of RoW.
Furthermore, in the RoW many countries not only speak the same language (FTR English) but also have far more in common than some of the basketcase nations that are currently in the EU.
That being said, I don’t want to stop EU foreigners from working in the UK, I just want them to go through a points-based visa system if they want to ‘try’ for work in the UK.
Fair is fair!
@Tarquin. Your reply to Martin is the most stupid thing i have read in A VERY LONG TIME. How do you know the quality of Bulgarian doctors? As to the the world university ranking, I don’t think it is any sort of indicator in this case. As a matter of fact I graduated from one of your top universities (in top 5) and I have been marking reports for the past year. The lever=l of writing and English is like nothing I have seen before, there are many students from RoW that have an appalling language level but they pay and they get accepted. Then all the money is used for research by PhDs and to publicize and push the university further. And of course the UK will attract cleaners….. Working as a cleaner is lucrative because the pay is 8/hour but doctors don’t earn much (especially when you have the whole of the EU to chose from). But let’s talk about the UK shall we, the number of people without a GCSE is quite high. The government is even giving people money to try and keep them in the system. A friend of mine was in such school in Liverpool and some of the stories she’s told me are just hard to believe. Please look at your country first before judging others. I imagine you have NEVER lived in Bulgaria or any other Eastern European country. I am expecting something quite vicious because there is no self-criticism in your comments but go ahead, i hope it makes you feel better :)
@EU Citizen
What emotional, irrational, illogical twaddle!
Despite providing sources to support my assertion re the quality of Bulgarian doctors – your hyper-emotional vent has blinded you to logic!
I am guessing that the average Aussie, Kiwi, Yank or Canadian (from the RoW) would have a command of English better than the average incontinent-alist EU foreigner, what sayest thou?
£8/hour is not considered lucrative by me or many UK citizens, only poor EU foreigners would think as such.
As regards not living in Bulgaria, even Bulgarians don’t want to live in Bulgaria judging by its rapid population decline, so why on earth would I want to go to such a benighted, blighted, beggared and buggered country such as Bulgaria?
The UK has its negative aspects, some of which include the poverty in Northern EU areas like Liverpool, Manchester, Sheffield, Leeds, Bradford, Glasgow and Birmingham which are made worse by the presence of too many [not all] poor EU foreigners lowering the wages of the already poor native UK citizens.
In answer to the forum question – making English the official and only EU language would make the EU more globally competitive.
you’re talking about neoliberal issues while Rome burns – no wonder the EU is imploding
Don’t talk about the EU anymore. A matter of time before the entire EU project collapses. The southern and eastern EU member states know that the EU is going to implode but they want to milk the cow as long as it lasts.
How are they milking it ?
The EU need to reach out to every average citizen. We need to raise the bar of education and participation for the youngsters and for the elderly in equal measure. We need to create a society where everyone is happy to offer his/her contribution and everyone feels appreciated.
– Continuous learning: Use Smartphone applications in an intelligent way to inform, teach, coach the people in their everyday life.
– Social inclusion: Make people feel part of a system to which they feel happy to contribute. No one has to be left behind, everyone can and has to contribute.
– Reform National medias: Prescribe movies and TV programmes in original languages with subtitles for ALL Member States. Educational programmes. Commercial televisions should broadcast quality cultural contents and compete with publicly funded ones and not the other way around.
– Entrepreneurship: Reach out everyone making everyone aware of how EU structural funds and national existing frameworks can be used to make business. Produce a generation of potential entrepreneurs. Use existing best practices (California, Israel) and replicate the successful models.
– Reform of the public sector: A wider control and rewarding system to make the public sector more efficient (Key Performance Indicators that should be fixed for all public employees and a scheme to financially reward the best performers)
– Conditional Unemployment Benefits: Money should be given only upon proven social work to pay for their cost and Vocational Training to be quickly reintegrated into the job market.
– Reform of the Banking Sector: Tighter regulations on financial services industry (Ban products like Hedge Funds and all sorts of speculation). Nationalise bad performing banks that have undergone a bailout programme. Tax payers cannot pay for CEOs ‘ mistakes.
– Labour market mobility: Language courses in private and public companies. Exchange programmes for workers of different Member States. International Companies are more efficient and productive than National ones because competition stimulates productivity.
– Single European Market: Fiscal instruments to facilitate the creation of new enterprises and SMEs. Promotion of crossborder business, reduce the burden of the language barriers and regulatory compliance by simplifying and harmonising national regulations and allowing foreign entrepreneurs to use English in documentation and tax returns.
Hi Andrej, although I’d prefer a much smaller bureaucracy and funding, I give you a thumbs up for the “- Reform of the public sector” point to which I’d add “KPIs for public administrations and also to public member states”.
“- Reform of the Banking Sector:”, Do you mean nationalize losses? I don’t know enough about banking, citizens and investors must be protected up to a certain point but, where the responsibility is left?
And a big thumbs up for the last point, about the fiscal incentives for the Single European Market. Also English should be allowed on every State on every public administration form.
Study carefully this video. And rid yourselves of lunatic make work legislation.
https://www.youtube.com/watch?v=1pGOzhhOAF8
And first and foremost, stop telling lies to your citizens and face up to the reality that the EU is defunct. And it came about by ignorant uneducated groups of half wits trying to run the world without having the slightest idea of what that means.
Hence you get idiots like Newland telling the world to F the EU. Irresponsible hinge loose females trying to pretend they are tough, like they believe a man would be.
……………a great presentation about the EU waltzing & kissing illusionists!
More reglaments about the size of cucumbers and statements that drinking water cannot prevent dehydration
More reglaments about the size of cucumbers and statements that drinking water cannot prevent dehydration
Low and simple taxes. Not having the Comission harrassing US companies. Not having Magaret Vestager and Oettinger in the Comission.
Fibre optic for free for every household would improve our competitiveness. But the problem is that the EU only listens to lobbyists and not to ideas by the civil society. I can suggest what I want, there will be no change. Even dialogue not working right.
No such desire by the EU- to listen or to improve democracy! Still hopeful?
EU officials were designed to shuffle their own papers- not wasting time with “funny” demands coming from common voters.
National governments might receive an ear or two. EU- a “priestly caste” of elite technocratic functionaries serving their elite & their well established equals!
Please start right at the end & bottom of any national member party’s queue.
You are right that it looks strange, if the EU offers a dialogue and no one from the EU is here to answer questions or something like that.
Lesser regulation and financial risks for small and micro businesses, easier to read and understand tax codes and business laws , end or decrease of agricultural subsidies and massive programatic increase in the renewable energy, increase the retirement age.
Probably choosing an area of expertise in particular and then developing it beyond the bounds of global competition…
ending the euro or letting countries have more margin to rise or lower taxes, values… a currency with such inequal wages is completely utopic and disastrous. In Portugal the NMW is 530€, which is not enough
If it’s the same value in the old currency then it’s better… The devalueing trick of national currencies only worked in far more isolated societies not in the age of instant communication. Taxes are national competence still.
1. re-industrialize
2. revert the demographic trend
3. end sanctions imposed on Russia and collaborate with it
4. embrace renewable energy (this should keep billions of Euros within the EU)
5. address organized crime and corruption
6. create a stable regulatory and legal framework for enterprises (like in Switzerland)
@Martin Unterholzner
These are many good ideas, especially the renewable energies. Hope they listen.
la prima cosa da fare è togliere l’euro che impedisce la crescita perchè come viene uno schoc esterno si taglia sullo sviluppo interno dunque da fuori la UE controllano la crescita interna alla UE , siamo ricattabili dai mercati internazionali . La seconda cosa ,ciò che da valore alla moneta è il lavoro , fare investimenti sul lavoro ( DIRITTI SOCIALI ANNESSI che con l’euro li stiamo perdendo perchè il privato che investe vuole spendere il meno possibile per la competitività anche tra Paesi interni alla UE perchè non ci sta la redistribuzione della ricchezza come avviene in uno Stato, la UE non è uno Stato ) cosi da poter avere qualcosa da scambiare con l’esterno.
la prima cosa da fare è togliere l’euro che impedisce la crescita perchè come viene uno schoc esterno si taglia sullo sviluppo interno dunque da fuori la UE controllano la crescita interna alla UE , siamo ricattabili dai mercati internazionali . La seconda cosa ,ciò che da valore alla moneta è il lavoro , fare investimenti sul lavoro ( DIRITTI SOCIALI ANNESSI che con l’euro li stiamo perdendo perchè il privato che investe vuole spendere il meno possibile per la competitività anche tra Paesi interni alla UE perchè non ci sta la redistribuzione della ricchezza come avviene in uno Stato, la UE non è uno Stato ) cosi da poter avere qualcosa da scambiare con l’esterno.
Certamente si può anche discutere dell’euro. Però noi italiani dobbiamo anche essere onesti e ammettere che non tutto quello che non va è colpa degli altri (o UE o della Merkel). Per esempio i debiti accumulati negli anni 90 non sono colpa dell’UE. Il fatto che le imprese non ce lo fanno per la burocrazia non è colpa della Merkel. È anche colpa nostra se la giustizia è lentissima cosichè per avere una decisione ci vogliono 10 anni.
Buy EU made. Eat and drink EU. Holiday in EU countries. Unity, solidarity and harmony among the people of Europe.
The EU needs to reach out to every average citizen. We need to raise the bar of education and participation for the youngsters and for the elderly in equal measure. We need to create a society where everyone is happy to offer his/her contribution and everyone feels appreciated.
– Continuous learning: Use Smartphone applications in an intelligent way to inform, teach, coach the people in their everyday life.
– Social inclusion: Make people feel part of a system to which they feel happy to contribute. No one has to be left behind, everyone can and has to contribute.
– Reform National medias: Prescribe movies and TV programmes in original languages with subtitles for ALL Member States. Educational programmes. Commercial televisions should broadcast quality cultural contents and compete with publicly funded ones and not the other way around.
– Entrepreneurship: Reach out everyone making everyone aware of how EU structural funds and national existing frameworks can be used to make business. Produce a generation of potential entrepreneurs. Use existing best practices (California, Israel) and replicate the successful models.
– Reform of the public sector: A wider control and rewarding system to make the public sector more efficient (Key Performance Indicators that should be fixed for all public employees and a scheme to financially reward the best performers)
– Conditional Unemployment Benefits: Money should be given only upon proven social work to pay for their cost and Vocational Training to be quickly reintegrated into the job market.
– Reform of the Banking Sector: Tighter regulations on financial services industry (Ban products like Hedge Funds and all sorts of speculation). Nationalise bad performing banks that have undergone a bailout programme. Tax payers cannot pay for CEOs ‘ mistakes.
– Labour market mobility: Language courses in private and public companies. Exchange programmes for workers of different Member States. International Companies are more efficient and productive than National ones because competition stimulates productivity.
– Single European Market: Fiscal instruments to facilitate the creation of new enterprises and SMEs. Promotion of crossborder business, reduce the burden of the language barriers and regulatory compliance by simplifying and harmonising national regulations and allowing foreign entrepreneurs to use English in documentation and tax returns.
Tax the mega-rich and corporation and give a guaranteed minimum income to the people and no working tax. There will be no need for pension, unemployment or any other benefit. Therefore the employer saves these costs from the wages, the worker saves tax so gets an increase in income. Create a tarrif on products made with exploited labour and give a deadline for the corporation to be a member of a fair-trade scheme. And products can be made more competitively. If all citizens in the EU had more spending money the EU would be even more attractive market for trade. Jobs would increase as more people would retire earlier and more mothers would stay home. And peoples entrepreneurial spirit would be set free and actualised.
Throwing germany out and thus solving the persistent German Problem Europe has since 1871.
We will be competitive if we keep the European tradition of being a guarantor of moral and ethical values. We will not be competitive if the leveling down to the level of the worst things in the world only to large companies can continue to robbing us and to transfer our money, the wealth of Europe, to tax havens. This is the fastest way to the end of the European Union, and is to be followed apace.
@Ana Fonseca
LOL!
“…if we keep the European tradition of being a guarantor of moral and ethical values.”
What a load of tosh!
Thus, while remaining within the framework of liberal globalism, the EU occupies a more moderate stance. At the same time, it mentions distinctive European values when it speaks against “intolerance”, but fails to name such or explain how they differ from the “global” ones.
Experience is a hard teacher because she gives the test first, the lesson afterwards.