G20 Agenda

A recent document in the European Parliament caught my attention. I replied to the Commission authors as follows:
Your short paper “The G20 Agenda” was circulated to the European parliament’s Interparliamentary delegation to Korea, while we were in Seoul last week.  I should like to take up a couple of points with you:
“Need to accelerate fiscal consolidation, but in a growth-friendly way”.  I think you have made a wholly unrealistic assumption that there are growth-friendly ways to cut spending and increase taxes.  We know that this is not the case, and that any fiscal consolidation is likely to impact negatively on growth and economic activity.  We have to do it, because our borrowing position is unsustainable, but let’s not pretend it’s easy.  To imply the opposite, without giving any practical examples of how it might be achieved, is simply to muddy the water.
“We should argue for ……. structural reforms that can increase labour productivity”.  I am a member of the parliament’s Unemployment Committee, and for years we have been passing a constant stream of measures designed to offer better “employee protection” (in fact these measures broadly have the opposite effect); to make labour markets less flexible, responsive and competitive; to increase unit labour costs in European economies; and to leave the EU less able to face the pressures of globalisation.  This is the reality.  This is the endemic culture which we have created in the EU.  To argue now that we should push for increased labour productivity is to reverse decades of social and employment regulation.
I must admit that when I read it, I despaired.  What is the point in talking about labour productivity (and preaching that message to the G20) when we persistently do the opposite?
I should be glad of your further comments.
Best regards 

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s