The crushing costs of non-Europe Anno 2015; The payback of a smarter Europe

#CriticalThinking

Digital & Data Governance

Picture of Eva Kjer Hansen
Eva Kjer Hansen

Minister for Gender Equality and Nordic Cooperation, Denmark

The high youth unemployment in Europe is a tragedy. It affects the lives of almost 1 in 4 of all young people who are ready but unable to use their skills and gain their living. They are victims of the financial and economic crisis and they feel they have been let down by the political establishment. As a result they lose faith in national governments and in European leadership.

How can Europe help this younger generation? The challenge here is too big to be answered by those social initiatives alone: Europe suffers from lack of innovation, lack of competitiveness and lack of growth. What we need is a new Cecchini report. Let me explain.

In 1988, to jumpstart the drive toward an EU Single Market, the European Commission funded the research programme entitled “The cost of non-Europe. Chaired by Paolo Cecchini, a former top official at the Commission’s DG Internal Market and Industrial Affairs with extensive experience in economic and trade policy, a group of experts produced a report explaining the potential gains of completing the 1992 Single Market programme.

The conclusion was: “The economic gains from the 1992 programme could rise to 200 billion ECU or more, together with a substantial boost to employment.”  The report created a vigorous debate and strong arguments. It became a driver towards removing barriers and putting legislation on track.

Today, we need a new report on the “cost of non-Europe”. The challenges are great, and failing to act has a devastating daily price for Europe’s 5 million unemployed youth. The single market is still not complete decades later, and finishing the job has great potential. Let me give a few examples:

 

    • The single market for services: Intra-European trade in services accounts for up to 70 percent of all trade, yet it is much less integrated than trade in goods. Not only because services are less tradable across borders, but also because national barriers still exist in this field. The Service Directive deserves more-consistent implementation, and new initiatives are needed to knock down those barriers. This way, young entrepreneurs could build their businesses Europe-wide in a market with a half billion consumers.

 

    • A connected digital single market: The single market is not properly prepared for new digital technologies. Common rules for consumer and data protection would offer a level playing field for companies in the digital sector. Some experts argue that up to 250 billion euro of additional growth can be generated from a connected digital single market. A major boost for young start-ups across Europe.

 

    • The single market for energy: It, too, has unlocked potential. New, interconnected energy infrastructure is needed as well as clear rules for national subsidies. Secure, sustainable and affordable energy supplies are preconditions for economic growth. An EU energy grid can drive innovation in renewable energy, with the potential benefit for young, innovative firms.

 

In some cases, existing rules can do the job – they just need the political impetus to be enforced. In other cases, new and simplified rules and initiatives have to be put in place. For instance, a sector approach to service liberalisation or a common European label for secure e-trade.

What can provide that impetus? I believe a new “Cecchini Report, anno 2015” could provide the push needed, a thorough report on potential gains can be the driver for growth generated by a well-functioning single market. This is a precondition for creating new jobs for young Europeans and to give them hope for the future.

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