A Pro-Growth Agenda for Europe
September 18, 2003
Europe must make structural reforms in order to achieve sustainable, robust productivity growth, says the British government's chief financial officer, Gordon Brown. In order to do so, it needs to adopt policies similar to those being pursued in the United States and United Kingdom. This would represent a departure from the course taken by the European Union in the past.
In a growth agenda, says Brown, Europe must:
- Embrace labor market flexibility in order to create jobs -- just 5 percent of Americans out of work are unemployed for more than a year -- in contrast to 50 percent of the unemployed in Germany, 30 percent per cent in France, and 60 percent in Italy.
- Embrace liberalization in product and capital markets, including tax incentives to promote a venture-capital industry.
- Encourage competition so that the single market can deliver lower prices and greater productivity, and abolish wasteful state aid.
- Favor tax competition and reject tax harmonization -- the notion that the tax burden must be uniform throughout Europe.
And finally, regulate only where necessary and deregulate where possible -- subjecting every proposed regulation to "the costs test, then the jobs test and then the 'is it really necessary' test. Existing regulations should be put to the same tests," says Brown.
Source: Rt. Hon. Gordon Brown (Chancellor of the Exchequer ), "A Europe More Like America," Wall Street Journal, September 18, 2003.
For WSJ text (requires subscription)
Browse more articles on International Issues