The view of the EU economic crisis is far worse seen from outside - specifically in the Latin American countries - compared to businessmen within the EU, according to a report prepared by INSEAD and Booz on the State of the European Union for the European Executive Council, organizers of the second annual Sate of the European Union conference in Brussels today...
"The view of business is 'get the European project finished'; it's not time for a European contract yet. Focus on the broader issues of fiscal and monetary policies and fostering peace and democracy and let the individual countries take care of their social issues," says INSEAD professor Ludo Van der Heyden, one of the authors of the study.
"One of the big questions is how to leverage the power and wealth of Europe," said Henrik Bourgeois, VP of European Affairs at GE. "Europe should try to reduce the turbulence and volatility within the union...it could start by reducing budget deficits an implementing fiscal contract."
Europe needs to continue to be the world's most open economy and must avoid protectionist reflexes in this time of crisis, both externally and internally as a lot of progress is yet to be made in the internal market within the EU. There could be a truly integrated energy market for example.Labor Market Reform
Europe needs to work on labor market reforms: matching skills with areas of growth (there is a need for investment in lifelong learning, particularly for young professionals), but we need more flexible labor regulation, said Henrik Bourgeois.
We need less tax burdens especially on labor markets and Europe needs to foster labor mobility within the EU.
Europe needs to continue to invest in innovation. And it needs to be prepared to go to the next level of economic integration; economic coordination is not sufficient. There must be a unified roadmap. EU politicians and policy-makers must be prepared to take quick actions if and when necessary. This makes business sense for investors and for Europe's commercial partners.Copyright INSEAD Knowledge 2012