Brussels, 27/03/2012 (Agence Europe) - The secretary general of the Organisation for Economic Cooperation and Development (OECD), Angel Gurría, called recently for a genuine competitiveness pact in Europe, along with the public spending cuts that have already been agreed upon (the budget pact). He says a competitiveness pact could make the most of the full potential of the EU's single market.
Addressing MEPs on the EP's economic and monetary affairs committee, Gurría said that the centre of economic gravity had shifted southwards and eastwards, with emerging economies now accounting for half of the world's GDP, compared with only 36% when the OECD was set up, and low growth in Europe likely, with medium-term forecasts of around 1.5% a year on average, lower than leading global competitors. Calling for the EU to wake up, Gurría called for a lightbulb moment in the form of a “Sputnik moment”, referring to the US push to conquer space after the Russians got there first with the launch of the Sputnik satellite in the 1950s. In order to return to high productivity to deal with social inequalities, he said a competitiveness pact would be a good idea, including ambitious structural reforms by freeing up the service sector, making labour markets flexible and encouraging entrepreneurship and innovation.
Internal Market. Gurría, who used to be Mexico's finance minister, said that the single market was one of the greatest advantages of Europe and in order to make the most of its growth potential, the regulations underlying the single market need more active implementation and mobility should be facilitated to help Europeans move around the continent in search of work by recognising professional qualifications and completing grid infrastructure. The OECD therefore recommends producing annual reports on each member state to highlight strengths and weaknesses in the approach to the single market. This idea was taken up on Tuesday 27 March by EU Euro Commissioner Olli Rehn, who said that the single market played a crucial role and could clearly do more than at present. He said he would be unveiling new measures to boost internal market governance and ensure uniform respect for EU rules at national level, with national reports setting out facts, figures and recommendations. Before the summer, the Commission will be publishing a Green Paper on funding for the real economy (see EUROPE 10579).
In response to questions from Liêm Hoang-Ngoc (S&D, France), Gurría said it would be difficult if not impossible to separate out investment spending from other spending in a country's budget, and such an attempt would be a “mirage”. In the updating of the stability and growth pact, the European Left called for measures to ensure that public spending cuts did not hit investment in long and medium-term growth. (MB/transl.fl)