[Comment] European economy in need of the right vitamins
MARIA VAN DER HOEVEN AND LENE ESPERSEN
01.12.2008 @ 09:27 CET
EUOBSERVER / COMMENT - The financial crisis has started to affect the real economy in Europe. Several countries are experiencing negative economic growth. The European Commission and the OECD predict serious weak or negative growth rates in 2009.
The question remains which medicine we choose to give the patient.
Small economies like the Dutch and Danish are closely interlinked with the rest of Europe (Photo: wikipedia)
This Monday (1 December), we will meet with our EU-colleagues in the Competitiveness Council to discuss the content of an EU-recovery plan to stimulate the European economy.
A co-ordinated European response is now essential. We should act together to minimise the impact of the financial crisis on the real economy.
Needless to say, our efforts must take into account the different economic situations in the member states, as well as the initiatives already taken. Following the rules of the European Stability and Growth Pact is key.
Many countries have already taken national initiatives that must be reflected when discussing the new proposals from the European Commission.
Some countries may react to the recession by protecting their own companies and labour.
From a Dutch and Danish point of view, such crisis initiatives must always have future prospects in mind. We should make sure that companies remain able to invest, even when credit conditions are tight. Not only is investment crucial to keep the economy going in the short run, it is also a prerequisite for innovation.
Our investments must especially be directed into green technologies, research and development that lead to more sustainable production in the future. It is crucial that interventions to stimulate the economy in the short run also strengthen European competitiveness in the long term.
Free trade instead of protectionism
We believe that Europe must focus on the innovation agenda. Actions taken to stimulate the economy in the short term can also contribute to strengthening innovation in the long run.
This is the case, for instance, if we choose to stimulate incentives for sustainable growth.
We look forward to the debate on Monday, and in the following weeks, on perspectives for a European recovery.
Small economies like the Dutch and Danish are closely interlinked with the rest of Europe. Our aim to create good framework conditions for businesses will only be successful if our closest trading partners in Europe also strengthen their economies and competitiveness.
To ensure competitiveness, we will argue in favour of openness and free trade instead of protectionism, both within the single market, and between Europe and the rest of the world.
State aid to face scrutiny
We will carefully scrutinize the need for state aid, in order to minimise its distorting effects on competitiveness, and we will focus on initiatives that create future prospects for the economy.
EU member states must continue their progress, to increase employment and flexibility of the labour market, and to ensure massive investments in knowledge, skills and improving the qualification of the workforce.
On Monday, and in the weeks to come, we will work actively to ensure a progressive competitiveness strategy for Europe.
The immediate panic and urge for quick actions should go hand in hand with keeping our focus on the goal in the long run: to create a dynamic and competitive knowledge-based economy to foster sustainable growth and jobs.
Maria van der Hoeven is Dutch Minister of Economic Affairs and Lene Espersen is Deputy Prime Minister and Minister for Economic and Business Affairs in Denmark