David Cameron and other EU leaders met on Wednesday and announced a number of ‘innovative ideas’ that can help generate growth in Europe. Looking at the official conclusions of the summit and unofficial press reports, it is a struggle to see what they were. The summit was to tackle Europe’s growth problem, which has been overshadowed by efforts to save the eurozone and restore some kind of financial stability. Unsurprisingly, talk turned to Greece: all agreed that it should remain in the eurozone, on its current terms, and that the Greek voters would see reason second time around and accept the need for growth defying cuts.
After discussing the issues surrounding Greece, talk turned to growth. They paid lip service to the Single Market, Europe’s only source of sustainable growth, as well as: the need to agree the EU patent; the need to develop a European digital and energy market; the need to conclude Free Trade Agreements with India and Japan; the need to give SMEs access to credit; the need to tackle youth unemployment; and to the need to deliver an EU budget biased towards growth.
Some means suggested are sensible if not new, such as increasing the European Investment Bank’s capital; or using unspent EU funds on infrastructure projects. Some are not sensible such as the Financial Transaction Tax which will do nothing to boost growth. It is unclear if the UK or France will back down on the location of the patent court so as to solve the current impasse. Will EU countries tell the Commission to stop a new EU contract law regime that is unlikely to make it easier to trade across borders? And will the rich countries agree to take less money out of the new EU budget and give it directly to businesses to design new products and services? At the moment, this seems unlikely even though all of these could make a real difference.
