Governments ‘paying lip service’ to EU on economy

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Frank Brown, dean of INSEAD business school, says Europe must get its act together if it wants to emerge stronger from the economic crisis. He spoke to EURACTIV ahead of this year's European Business Summit (EBS).

Last month, EU leaders gathered in Brussels to agree on a new ten-year economic strategy in the midst of the worst recession in decades.

At the summit, leaders backed the objectives of investing 3% of Gross Domestic Product (GDP) in research and raising employment levels across the continent. The proposed targets were laid down in a European Commission proposal called 'Europe 2020'.

However, amid disagreement over the EU's legal right to set targets, the leaders failed to back objectives on poverty or education – two of the five headline goals set out in the Commission's original proposal (EURACTIV 26/03/10).

According to Frank Brown, the EU's tendency for division and indecisiveness could have negative consequences for the economy, as shown by the lack of commitment to the EU's previous economic strategy, the Lisbon Agenda.

In the past ten years, EU leaders repeatedly gave their backing to the Lisbon Agenda but all they were really doing was "paying lip service to the collective," Brown argues.

"Everything that has been attempted has failed because of national interests opposed to pan-European interests. And so I think that the 'Europe 2020' strategy is another attempt to say 'let's get support behind a more collective approach to these critical issues."

Brown, who spent 26 years advising private companies at PricewaterhouseCoopers and developed leadership programmes within the firm, says the main challenge is to be clear about who does what.

"If you want to be successful, you have to get agreement among the members as to what is global and what is local, or what is national and what is federated."

"I think that has not been made clear in Europe. For Europe, it is really a matter of getting its act together as a collective."

"It goes back to the basic fundamentals of who decides," says Brown, who will moderate the closing plenary – entitled 'Europe in the world: Ready to lead?' – at this year's European Business Summit on 1 July.

Encouraging signs

Brown says some countries have made headway in creating a better environment for business.

"I think France in particular has done a great job over the last couple of years. The real question is, how do we go from local initiatives to more federated initiatives across Europe that will create [the] sustainable, scalable business growth" to pull Europe out of recession.

He is also positive about Europe's capacity to resist the downturn and challenged the perception that the US is recovering more quickly.

"One of the reasons that the US turnaround may appear to be more significant is that the downturn in Europe was not as severe as it was in the US. So you are talking about a different base. That goes back to the fact that European economies are not as consumption-driven as the US economy is."

But he believes it "would be an enormous mistake" to cut down education budgets due to the recession.

"The support for education has to continue. I also still think we need to look more fundamentally at early education because the methodology used in most European countries is not necessarily the friendliest towards creating innovative minds."

To read the interview in full, please click here.

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