ROME – It is becoming increasingly clear that if Europe is to overcome its crisis, business as usual will not suffice. We need a Europe that is more concrete, less rhetorical, and better suited to the current global economy. We need to focus not only on the European Union’s specific policies, but also on how to change its “politics” – a change that must place economic growth at the top of the agenda.
Europe does not need a debate between austerity and growth; it needs to be pragmatic. A good example of this was the most recent European Council, which addressed two of Europe’s most pressing problems: malfunctioning labor markets, reflected in record-high youth unemployment, and malfunctioning credit markets, in which access to financing is difficult and lending rates vary considerably among different parts of the single market.
The outcome of the Council’s June meeting was encouraging, and we must continue on that path in the coming months to make progress on two equally important issues: how to foster innovation and the digital economy, and how to ensure Europe’s manufacturing competitiveness.
We need to assess what can be achieved at the national level and what EU institutions should do. Fiscal consolidation and national reforms are essential and should continue. But we can better achieve our objectives under an EU framework that supports, rather than impedes, national action to boost growth and employment. The European Commission’s recent decision to grant member states some flexibility for productive public investment linked to EU structural funds is a welcome step in this direction.