July 14, 2005

EU economy

An article about the EU economy by EU Observer.
The paper argues that economic growth in the area will be half of its current level in two decades if the countries' governments fail to implement necessary reforms.
The such as the reforms set out in the, now dead, Lisbon agenda. But the kind of reforms that are needed would lead to more of the Anglo-Saxon economic model, fear of which was one of the reasons for the rejection by the French in the EU Constitution.

The EU's finance ministers approved a disciplinary action against Italy and Portugal at their meeting on Tuesday, and warned Germany and France that they will breach the 3 percent deficit limit set this year, with Germany heading for 3.7 percent in 2005 and 3.4 percent in 2006.

Insisting that the Growth and Stability pact was still in existance, when it is dead. Or at least it is dead for the major economies such as France and Germany that can break the rules with impunity, but not for smaller economies such as Portugal which apparently have to obey the rules even if the country that created this set of rules, Germany, doesn't.

The chancellor pointed out that the EU's economies have been failing to bring the unemployed back to work, as about half of the block's 20 million jobless have been redundant for more than a year.

He therefore suggested that both national and European spending should be focused on improving education, research, innovation and life-long training in order to make citizens better prepared to change jobs in case of restructuring in various spheres.

"Only if we invest in education, infrastructure and science will we be able to compete with other emerging global players other than on lower pay", he said.
Which is all true, but will the EU listen. Maybe if there is some juicy pork to be handed around.


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