EU must renew its priorities to keep pace

EU membership benefits the Irish and British economies, but reform is needed to ensure the union is more open and stays globally competitive, write Danny McCoy and John Cridland

Irish and British business, large, medium andsmall, is unequivocal — membership of the EU brings many benefits to both of our economies, but it must reform to become more open and stay globally competitive.

Access to a single market of 500m consumers has had a positive impact on firms, allowing Irish and British companies to sell their world-class goods and services throughout Europe, not to mention the boost to foreign direct investment from around the world that EU membership has brought.

The world is rapidly changing and this is the year the world’s emerging markets — from the Eastern tigers to the growing powerhouses of Latin America — are set to take over from the developed world as the majority shareholder in the global economy. This throws up new challenges to Ireland, Britain, but also the EU. The path to sustainable and healthy growth will be found in delivering on a reform and competitiveness agenda to create the jobs of the future.

The EU must renew its priorities and purpose to keep pace with its growing number of international rivals. It must be outward-looking, signing more trade deals and breaking down trade barriers. The EU has already signed free trade deals with nearly 50 partners, giving British and Irish firms access to nearly €18 trillion worth of markets around the globe. It is now working towards opening up developed and emerging markets which would double that figure, but we need to see greater urgency in signing these deals with the US and Japan among others.

The EU must be open and competitive, building a single market fit for the 21st century that means a genuine single market for services and the creation of a digital single market to reduce barriers to e-commerce and in turn boost trade and investment.

Putting in place the building blocks to roll-out digital infrastructure across the continent will make it easier for companies to reach out to new customers, communicate with their suppliers and simply go about their daily business in a modern economy.

There must also be a change in the EU’s regulatory approach to drive European competitiveness, reducing the burden that can weigh down aspiring firms, particularly small and medium-sized enterprises. There should be a moratorium on regulation where there is a strong argument for decisions to be taken individually by member states, particularly in the areas of employment and ‘lifestyle’ regulation.

The EU’s authority has seeped into areas and issues where national parliaments are often better placed to make decisions. With a strong tendency to regulate, the European Commission should be conscious of ‘mission creep’, particularly in areas around health and safety, and welfare legislation.

And, while the EU undoubtedly has to take the steps needed to save the eurozone, it must also safeguard the broader Single Market at the same time. The EU of tomorrow must continue to work for all members, with the right balance of power and division of tasks struck between the Commission, Parliament and the 28 member states.

With European elections in 2014 and a new set of Commissioners in place from then on, the EU will need to make sure an open trade policy remains at the heart of its long-term growth strategy.

The new Commission will need to recognise and respect the boundaries of national parliaments, directly elected by their voters. But even more importantly, it must improve and streamline how it operates by refocusing Commissioners to key growth portfolios like external trade and the single market, rather than 26 different commission portfolios each with a separate commissioner and legislative agenda.

Now is the time for the EU to refocus on boosting jobs and growth across the Continent. It is an achievable reform agenda, which will give all of our own young people a better future. Political ambition and action must be directed to those areas where the EU can add real value giving momentum to the efforts to create a new Europe able to compete globally and win.

Danny McCoy is Ibec CEO and John Cridland is the director general of the Confederation of British Industry


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