Europe Is Taking Baby Steps Toward an Economic Boom |
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Mario Draghi, the former head of the European Central Bank, warned more than a year ago that the European Union faced “slow agony” if it didn’t pursue significant economic reform. He is not alone in his concern. European officials rightly worry about the bloc’s growth, competitiveness, and productivity lagging its geoeconomic rivals. The diagnosis has been clear for years, and the policies to address these economic problems aren’t mysterious. The issue is making them happen—and doing it fast enough to make a difference.
To that end, a growing number of policymakers as well as academics and financial professionals are urging the EU to focus on pragmatic steps to unlock capital to boost growth—and not leave the single market to rot—rather than pursuing grand institutional designs, which take years to materialize.
Mario Draghi, the former head of the European Central Bank, warned more than a year ago that the European Union faced “slow agony” if it didn’t pursue significant economic reform. He is not alone in his concern. European officials rightly worry about the bloc’s growth, competitiveness, and productivity lagging its geoeconomic rivals. The diagnosis has been clear for years, and the policies to address these economic problems aren’t mysterious. The issue is making them happen—and doing it fast enough to make a difference.
To that end, a growing number of policymakers as well as academics and financial professionals are urging the EU to focus on pragmatic steps to unlock capital to boost growth—and not leave the single market to rot—rather than pursuing grand institutional designs, which take years to materialize.
“We need an approach at the European level to decide quickly on those things where we can have a common approach that are not contentious,” said Pierre Gramegna, the head of the European Stability Mechanism and the European Financial Stability Facility, at a joint event in late January with the heads of the European Banking Authority and European Securities and Markets Authority. “If you have a legal approach and want everything to be perfect, it takes years. This is our biggest disadvantage in a world that’s changing fast. We must find a way to act more quickly.”
The integration of the markets for goods at EU level is far from complete, but the European market for financial and other services is even more fragmented. The European Central Bank (ECB) estimates that internal barriers in the goods and services markets are equivalent to tariffs of around 65 percent and 100 percent, respectively. “[O]ur internal market has stood still, especially in the areas that will shape future growth, like digital technology and........