Perspectives for European Economic Growth: A view from the Dutch Presidency

31 August 2004


Europe faced a range of problems with respect to competitiveness, Dutch Minister for Economic Affairs, Laurens Jan Brinkhorst said. The relatively high labour cost with comparably low labour participation and growing concern for the degree of labour productivity was at the heart of the European competitiveness woes. The Lisbon Agenda – the Union’s heralded project to ensure both economic stability and simultaneous growth and transform Europe into the world’s most competitive economy by 2010 – was suffering from an imbalance of focus, Mr. Brinkhorst said. While financial stability was a key condition for growth, too little attention had been paid to the growth dimension over all. Although Europe had achieved a monetary union that was even “close to a federation,” economic policy was still largely in the hands of Member States and could thus not be a guarantor for EU-wide growth close to the 3% goal set in the Lisbon Agenda. “There is a clear disjuncture that needs to be addressed. Growth and stability be addressed simultaneously.”

The Dutch EU Presidency was thus intent on refocusing on the concept of growth with the underpinning issues of labour cost, participation and productivity; advancing the internal market in services and finally, increasing peer pressure through Member State networks to secure greater implementation of EU legislation. Both Member State parliaments and the European Parliament had a particular role to play in forcing national governments to live up to their promises at the European level with respect to the implementation and enforcement of legislation. Integrated, comparative reporting, scoreboard mechanisms, roadmaps and ranking schemes could be of particular importance in this respect. “We need to increase the bite of peer pressure at Member State level,” Mr. Brinkhorst said.

Competitiveness Councils had not lived up to their full potential until now. “It is a ‘jamboree’ Council,” Mr. Brinkhorst said, referring both to the number of Member State ministers and civil servants attending Council meetings and the agenda addressed. Little collegiate character could evolve in the current setting. Four past, current and future EU Presidencies (Ireland, the Netherlands, Luxembourg and the United Kingdom) had joined hands to increase the positive work of the Competitiveness Council in focusing on growth as the central European problem. Better management of the Council meetings was essential. He praised the new Commission’s insight for appointing a Commissioner to coordinate between relevant Directorate-Generals and colleagues ahead of the meetings. Informal meetings would take place before actual Council meetings to facilitate interpersonal contacts and further a collaborative working atmosphere. 

Though the full mid-term review of the Lisbon Agenda would come under Luxembourg’s EU Presidency, the Netherlands wanted to forge ahead with practical political work on key areas. Too many crucial issues had become stalled over technicalities, he said, pointing to the European Patent as a key example. Although agreed upon by Member States years ago, it had “descended into disarray” over the question of language and translation. The Dutch Presidency would thus focus on four key issues: the liberalisation of the services market; the mid-term review; Better Regulation and the REACH chemicals legislation.

Four priorities for EU growth

Despite the advances in the 1988 Cecchini report on the internal market in services, “16 years later, we are nowhere,” the Minister said. While he could appreciate that services of public interest remained a difficult issue for many Member States, one could not ignore the fact that 70% of many Member States’ national economic gains were made in the services sector and that all stood to gain from a liberalisation in key service sectors. The Dutch Presidency wanted to realistically examine the issues that were causing problems to identify where concrete progress could be made.

On the mid-term review, the Dutch Presidency would focus on the issues raised by the Kok Report to be presented on 1 November and on the work in the related councils so as to be of sound assistance to the Luxembourg Presidency as it prepared its Spring Council.

Work had already begun in achieving a better regulatory framework in the European Union. Questionnaires had been sent to all 25 Member States in collaboration with the Commission to identify priorities for action. 15 surveys had already been returned and he expected all Member States to have responded by October. The functionality and reach of impact assessments and means to measure the cost of regulation would be addressed by the Dutch Presidency

Concluding finally on priorities for REACH (Registration, Evaluation and Authorisation of Chemicals), Mr. Brinkhorst said that one had to answer the question of how to marry the environmental costs of chemical pollution with growth achieved in the sector. Addressing the chemicals industry he said “it is an illusion to believe you can go without chemical regulation.” France, Germany and the United Kingdom had requested an impact assessment on the positive impact of chemical development against environmental repercussions.