'Further and faster economic reform' needed from EU, says Chancellor

The Treasury has called for "further and faster economic reform" to promote growth, jobs and prosperity in Europe, according to a department report published today.

The report, 'Advancing Long-Term Prosperity: Economic Reform in an Enlarged Europe', examined how Europe needs to respond to the challenges of globalisation, enlargement and ageing populations and advises that the problems of low growth and high unemployment will only be solved with "greater efficiency, flexibility and productivity". The report was published ahead of the 10 February meeting of EU Finance Ministers and the March European Council.

In March 2000, at the Lisbon European Council, Europe's leaders committed themselves to a 10-year programme of reform to make the European Union "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion." Today's report assesses progress towards that goal.

Welcoming the report, the Chancellor Gordon Brown warned that Europe must promote policies that "do not protect and shelter inefficiency, but promote competitiveness, enterprise, innovation and skills".

He added: "In the past four years since the Lisbon Council, the EU has made great steps, with significant reforms in many Member States. However, we still have a long way to go if Europe's economy is to match that of our major international competitors.

"We have created six million jobs since 1999. But Europe will still fail to meet its 2005 targets and must create another 21 million jobs to hit its target for 2010. Productivity in the US is at least 14% higher than in the EU.

"Europe will only solve its problems of low growth and high unemployment by becoming more efficient and increasing productivity - pressing ahead with reforms to increase product, labour and capital market flexibility, and ensuring that its policies are rooted in the realities of global competition and the opportunities it offers."

On March 25-26, EU heads of State and government will meet in Brussels at the spring European Council to discuss progress in economic reform and the challenges ahead.

(gmcg)