Only 22% of the European Council’s key country-specific reform recommendations are being satisfactorily implemented by EU member states, according to a BUSINESSEUROPE report. This is the key finding of its “Reform Barometer” for 2015.
The report from the Brussels-based organisation also compares the EU’s performance on a range of key indicators with key competitors.
On this, it says that:
· EU output remains 0.2% lower than its pre-crisis peak, while the US economy is already 8% higher than in 2008. During the same period, five million jobs have been lost in the EU, compared with around 1 million jobs created in the US;
· EU’s share of worldwide foreign direct investment in flows fell to 17% in 2013 compared with over 40% in 2000;
· The overall tax burden in the EU remains over 50% higher than in the US and over 25% higher than in Japan;
· The cost of starting a business in the EU is more than triple that of the US, while it takes businesses about twice as long to set up a company in the EU;
· Even with the recent fall in oil prices, industrial energy prices remain almost 2 1/2 times higher in the EU than in the US;
· The EU is the only economy where per capita investment in broadband fell between 2008 and 2013. In 2013, per capita investment in broadband was €90 in the EU, compared with €226 in Japan or €178 in the US.
Commenting on the results, Markus J. Beyrer, Director General of BUSINESSEUROPE said, “Those EU countries that have reformed in recent years, particularly Ireland, Portugal and Spain but also the Baltic states, are already benefitting from increasing output, falling unemployment and improved trade performance.
“But overall, too many countries have not put into practice the lesson that reform works. Europe is losing ground in terms of competitiveness with the US, China, India and Japan.”
He added, “We risk experiencing a period of low growth and high unemployment unless all member states get serious about reform”.
On the forthcoming EU heads of state talks on the European Commission’s “Energy Union” framework strategy, Beyrer added, “Industry looks forward to engaging with EU leaders to make it a success.
“We will be vigilant on the challenge of energy prices. Industrial energy prices remain almost 2.5 times higher than in the US. There is no time to lose to remove policy-driven costs.”
BUSINESSEUROPE is the umbrella body which represents the interests of scores of European businesses at the EU level.
By Martin Banks