Digital single market litmus test

After the Main points of EU digital single market strategy we turn to the potential gains and necessary means, according to the digital single market (DSM) communication COM(2015) 192 and the evidence report SWD(2015) 100.

Potential DSM gains and conditions

If we try to find the  potential gains from a future digital single market, as well as the required means, this seems to be the core according to the official documents:

1 Huge growth potential

Europe has the capabilities to lead in the global digital economy but we are currently not making the most of them. Fragmentation and barriers that do not exist in the physical Single Market are holding the EU back. Bringing down these barriers within Europe could contribute an additional EUR 415 billion to European GDP.

2 Necessary conditions

I believe that we must make much better use of the great opportunities offered by digital technologies, which know no borders. To do so, we will need to have the courage to break down national silos in telecoms regulation, in copyright and data protection legislation, in the management of radio waves and in the application of competition law.

Growth potential

The estimated GDP growth potential of 415 billion euros was mentioned in the DSM communication (page 3), which referred to the staff working document SWD(2015) 100 with evidence. I quote one sentence and one paragraph (page 5):

Between 2001 and 2011, ICT accounted for 30% of GDP growth in the EU but for 55% in the US.

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The DSM is an opportunity to close this gap. The potential contribution to European GDP from achieving such a fully functioning DSM has been estimated at EUR 415 billion. The long-run impact on GDP growth of the already observed digital reform efforts has been estimated at above 1%, while further efforts in line with the Digital Agenda for Europe targets would lead to an additional 2.1% of growth. Benefits from the current level of cross-border e-commerce are estimated at 0.27% of GDP. On the other hand, without a completed, secure and trustworthy DSM, new digital services for consumers and businesses, as well as services underpinning them (the Internet of Things, big data and cloud computing), may happen later or to a lesser extent in Europe.

The assertions of the staff working document were based on three studies offered as evidence:

European Parliament Research Service: Mapping the cost of Non-Europe, 2014-19, 2015

Lorenzani, D. and Varga, J.: The Economic Impact of Digital Structural Reforms, European Commission Economic Papers No 529, 2014

Francois, J. et al.: The Macro-economic Impact of Cross-border e-commerce in the EU, JRC/IPTS Digital Economy Working Paper No 2014-10, 2014

Breaking down national silos

Breaking down national silos in telecoms regulation, in copyright and data protection legislation, in the management of radio waves and in the application of competition law, in other words creating a seamless digital single market without national borders, was first mentioned in the political guidelines for the European Commission - see the publication A New Start for Europe - and reiterated in the DSM communication COM(2015) 192.

DSM litmus test

If the European Union and the European Economic Area want to catch up and overtake in order to become world leaders, digital single market regulation has to become better and more uniform than elsewhere, such as the federal United States and Canada.

This is the litmus test for each DSM proposal and reform in Europe.  Do the  governments of the member states, but also the European Commission and the European Parliament, have the political will and the ability to succeed?

Ralf Grahn

The Cost of Non-Europe project

Politicians joining forces with experts?

Real calculations, real numbers and different areas of expertise are needed if people are to decide what is better for them – Europe or non-Europe, summarised Kristina Belikova in the July 2014 story The Cost of Non-Europe in the Gbtimes. She referred to Klaus Welle, the secretary-general of the European Parliament, at the Martens Centre reasoning why the Cost of Non-Europe project made this parliamentary term different (pages 8 and 9):

My twelfth argument is that Jean-Claude Juncker’s ten points are in fact the Parliament’s ten points. And this is not an issue of copyright. Because Juncker's five points were inspired by what Parliament had been elaborating under the heading of ‘Mapping the Cost of Non-Europe’. Do you remember? Based on parliamentary reports adopted in Plenary, we had produced an agenda of what should be done over the next years – a positive agenda for European integration. We had asked ourselves what could be additional benefits of European regulations. What is the value added if we were to get rid of 28 sets of different national regulations in order to have one set of European regulation instead. You remember: this is not new; this is the original approach that paved the way to the Single Market. As I have said: nothing new, nothing sensational. This is a well-established methodology coming from the 80's. And you may also remember that we had identified a potential of one thousand billion Euro, per year, of potential benefit if further European integration were to happen in the area of:

- a genuine digital Europe,

- an updating of our Internal Market in the field of services,

- an updating of our financial service regulations,

- a genuine energy union,

- a better cooperation in security and defence,

- and others.

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What needs to be done in the years to come and why is this important? This is important because at the end of the day, if you draw a line under the agenda for the next five years, this is a programme for growth without debt.  

This would have been impossible without the European Parliamentary Research Service (EPRS; overview), particularly its European Value Added Unit (EAVA), which provides European Added Value Assessments and Cost of Non-Europe Reports which analyze policy areas where common action at EU level is absent but could bring greater efficiency and a public good for EU citizens.

***

In future blog posts we are going to look at what the Cost of Non-Europe Reports teach us about the potential of a seamless internal market (single market).

Opportunity knocks, when politicians join forces with experts.  

Ralf Grahn

EU growth and prosperity through EU2020?

Loss of competitiveness and export shares in world markets is the slippery road the member states of the European Union have been embarked on, but it is hardly the highway to growth and prosperity. The EU actually has a comprehensive strategy for economic growth, Europe 2020, but how credible is the commitment of the national leaders if they keep forgetting their own EU2020 master plan, at least without prodding? Just before each EU member state submits its National Reform Programme 2012, here are some Grahnlaw blog posts about relevant conclusions and statements concerning a return to growth, competitiveness and the creation of new jobs: European Council and the quest for growth European Council and Single Market: ambitious enough? EUCO challenge: growth despite budget balancing Breathing life into EU2020 necessary for growth, competitiveness and employment EU2020 from failure to action EU leaders: ”Oops, we forgot our strategy” European Council endorsed Annual Growth Survey 2012 priorities Is the Europe 2020 strategy jinxed? Ralf Grahn EU policy expert, speaker and lecturer

Is the Europe 2020 strategy jinxed?

In the article EU action plan to improve access to finance for SMEs I mentioned the information note from the Danish Council presidency:

European Council - Follow-up by the Council; Brussels, 19 March 2012 (document 7824/12)

The content is described on the front page:

In order to ensure that the General Affairs Council can fully play its general coordinating role as well as its specific role in ensuring the follow-up to European Council meetings, the Presidency has prepared the attached information note. The note outlines steps taken in implementation of the orientations agreed by the European Council at its meetings of December 2011 and March 2012, as well as at in the declaration of the Heads of State and Government of 30 January 2012. This note also sets out how these orientations will be taken forward by the Presidency within the Council until the end of the Presidency period, notwithstanding upcoming discussions to be held in Coreper and Council in respect to the orientations set out by the March 2012 European Council, in particular as regards paragraph 16 of its conclusions.

Peer pressure

So what did paragraph 16 of the conclusions of the spring (March) 2012 European Council say? The EUCO conclusions are available in all 23 official EU languages; here the English text, under Economic policy, which highlights some aspects of single market reform and compliance (although the single market has been mentioned in these and other conclusions as well):

16. The European Council considers that enhanced "peer pressure" can help raise the ownership and responsibility at the level of Heads of State or Government as regards the Council's and individual Member States' role in developing the Single Market and complying with its rules. To this effect, the European Council invites :
− the Commission to provide transparent scoreboards as a basis for appropriate benchmarking;
− the President of the European Council to promote regular monitoring by the European Council of progress achieved on key Single Market proposals in the various Council formations.

Follow-up note

The follow-up note deals with the growth agenda, including:

* the single market, Single Market Act,
* acces to finance for SMEs, the COSME programme,
* the forthcoming employment package,
* the reduction of the administrative and regulatory burden,
* innovation and Horizon 2020,
* the digital single market,
* the internal energy market


Under Economic policy, the following themes were among those mentioned:

* the next steps within the European Semester leading to recommendations on the National Reform Programmes and the Stability or Convergence Programmes of the member states as well as the prevention of macroeconomic imbalances revealed by the Alert Mechanism Report,
* the regulation of financial services,
* the two-pack proposals on euro area surveillance,
* the contribution of taxation to fiscal consolidation and growth,
* piloting European project bonds

Additional themes were the long term budget (Multiannual Financial Framework MFF), Justice and Home Affairs (including Schengen enlargement and governance, the Common European Asylum System), Climate (low-carbon 2050 strategy), Trade and Enlargement.


Jinxed Europe 2020?

Only a few weeks ago the spring European Council reminded itself and others that:

2. "Europe 2020" is Europe's strategy for jobs and growth and its comprehensive response to the challenges it is facing. In particular, the five targets set out for 2020 remain fully relevant and will continue to guide the action of Member States and the Union to promote employment; improve the conditions for innovation, research and development; meet our climate change and energy objectives; improve education levels and promote social inclusion in particular through the reduction of poverty.

However, yet again we see a paper from one or more member states skillfully evading the main EU2020 strategy for smart, sustainable and inclusive growth, despite dealing with certain concrete aspects of it.

It looks improbable that an EUCO president or EU member state can – in good faith - write an eight-page issues paper or equally long information note [edited] about the EU's growth agenda and economic policy, or the five pages of a twelve-country plan for growth in Europe without mentioning the Europe 2020 strategy.

Is EU2020 jinxed, or what?

Europe 2020 is supposed to be the main uniting economic reform strategy for all levels of government in the European Union and its member states, as the heads of states or government reiterated at the beginning of this month.

Have we ever seen or heard an intelligent explanation from the governments of the EU member states, or have the EU members shown us a diagnosis of amnesia?



General Affairs Council

Monday, 26 March 2012, the coordinating General Affairs Council (GAC) meets to discuss two main items, of which the second one is: Follow-up to the European Council 1-2 March 2012 (agenda).

In this respect, the background note for the GAC meeting offers practically nothing in addition to the presidency note 7824/12:

Follow-up to the [December] European Council

The Council will take stock of the follow-up to be given to the European Council meeting held on 1-2 March, on the basis of a presidency note (7824/12).

The meeting focus[ed] in particular on the growth agenda and on economic policy.

The follow-up discussion is not public, so if the General Affairs Council does not make drastic improvements to its conclusions, the presidency note is probably the best thing the public is left with regarding growth and economic policy for a while.



Ralf Grahn
public speaker on EU affairs

P.S. The multilingual Bloggingportal.eu already aggregates the posts from 944 Euroblogs. They represent an important part of the emerging European online public sphere, discussion across national and linguistic borders. Erkan's Field Diary is more than a Turkish delight. The anthropologist, Dr Erkan Saka follows and links to global, European and Turkish politics and events, not forgetting human rights, cyberculture and social media. Some of the posts are in English. Recommended reading.

Among the Euroblogs on Bloggingportal.eu you find my currently active blog trio, Grahnlaw (recently ranked fourth among political blogs in Finland), the Nordic Grahnblawg (written in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish). I write and speak about democracy and openness in the European Union, but increasingly about the crucial challenges of the global era for Europe: growth (EU2020) and the (digital) single market in the making.

European Council endorsed Annual Growth Survey 2012 priorities

The European Semester was kicked off by the Annual Growth Survey 2012 (AGS) Brussels, 23.11.2011 COM(2011) 815 final VOL. 1/5 (and the four annexes, Volumes 2-5).


EUCO conclusions

The conclusions of the spring European Council (EUCO) were brief and general in the fourth cornerstone paragraph:

4. For 2012, the European Council endorses the five priorities set out in the Commission's Annual Growth Survey for action taken at the EU and national level to:

– pursue differentiated, growth-friendly, fiscal consolidation,
– restore normal lending to the economy,
– promote growth and competitiveness,
– tackle unemployment and the social consequences of the crisis, and
– modernise public administration.

Synthesis report

When the European Council conclusions endorse the priorities proposed by the Commission, there is - if not a whole mountain - at least a molehill of views and conclusions behind each paragraph to inspire more detailed future policy work.

The Danish presidency prepared a shortcut: Implementation of the European Semester - Synthesis report (22 February 2012, Council document 6662/12).

However, the Synthesis report did not offer links to the various documents. Some readers may need to revisit the original and more detailed contributions submitted to the spring European Council, in order to find out what the five priorities set out in the Commission's Annual Growth Survey (AGS) and its annexes actually mean and require in the form of action.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

EU leaders: ”Oops, we forgot our strategy”

In its conclusions, the European Council suddenly remembered that it already has a comprehensive strategy for growth, competitiveness and employment: Europe 2020 (EU2020). The heads of state or government need to breathe life into their common strategy, because they frankly admit that their efforts to date are insufficient.


Amnesia

I strongly recommend president Herman Van Rompuy's strategic and elegant Issues Paper, written ahead of the spring European Council, but for some inexplicable reason he evaded the Europe 2020 strategy (EU2020).

The twelve prime ministers who wrote A plan for growth in Europe, calling for more resolute reform policies, as resolutely forgot to mention that the EU already has the EU2020 strategy.


EU2020 resurrected

It took the reply from Commission president José Manuel Barroso to remind these leaders of the existing strategy for this decade:

We have agreed on an ambitious and comprehensive growth and jobs strategy: Europe 2020. Our common ownership of it needs to be more visible to our citizens. They need to know that the EU has a clear strategy for building a better future and that all Member States are working in the same direction. There should be no artificial separation between EU and national growth policies, they reinforce each other.

The conclusions of the European Council (EUCO 4/12) then turned into a strong reminder of the crucial role of the Europe 2020 strategy and of the need to step up efforts significantly:

2. "Europe 2020" is Europe's strategy for jobs and growth and its comprehensive response to the challenges it is facing. In particular, the five targets set out for 2020 remain fully relevant and will continue to guide the action of Member States and the Union to promote employment; improve the conditions for innovation, research and development; meet our climate change and energy objectives; improve education levels and promote social inclusion in particular through the reduction of poverty.

3. However, efforts undertaken to date remain insufficient to meet most of these targets. It is therefore urgent to concentrate on the implementation of reforms, with a particular attention to measures which have a short-term effect on jobs and growth.

Much better. But why did it happen? How credible does the commitment look, when all these reform-minded leaders were happy to forget even the existence of EU2020, their common strategy for a decade of smart, sustainable and inclusive growth?

Will they still remember, having returned home?

Our reading tip for them and their officials is: Progress Report on the Europe 2020 Strategy COM(2011) 815 Annex I.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

EU2020 from failure to action

The heads of state or government reminded themselves of the comprehensive Europe 2020 growth strategy. In the European Council 1-2 March 2012 conclusions (EUCO 4/12, available in 23 languages) they assessed their own work to date:

3. However, efforts undertaken to date remain insufficient to meet most of these targets. It is therefore urgent to concentrate on the implementation of reforms, with a particular attention to measures which have a short-term effect on jobs and growth.

Insufficient reforms

The EU member states are lagging. Brownie points for honesty, although nothing more than the European Commission said in its second Annual Growth Survey 2012 (AGS), which kicked off the European Semester:

Annual Growth Survey 2012 VOL. 1/5; Brussels, 23.11.2011 COM(2011) 815 final (18 pages) 

Progress report on the Europe 2020 strategy VOL. 2/5 - ANNEX I; Brussels, 23.11.2011 COM(2011) 815 final (27 pages) 

Macro-economic report VOL. 3/5 - ANNEX II; Brussels, 23.11.2011 COM(2011) 815 final (21 pages) 

Draft joint employment report VOL. 4/5 - ANNEX III; Brussels, 23.11.2011 COM(2011) 815 final (16 pages) 

Growth-friendly tax policies in member states and better tax coordination in the EU VOL. 5/5 - ANNEX IV; Brussels, 23.11.2011 COM(2011) 815 final (13 pages) 

For those who think that the Commission is evil and biased, even the more recent (22 February 2012) synthesis report on the implementation of the European Semester (Council document 6662/12), prepared by the Danish Council presidency, is relatively open about less than brilliant progress (page 3):

The Annual Growth Survey shows that progress has been made in a number of areas, but much remains to be done.

In particular, measures announced or adopted during 2011 must now be implemented rigorously in all Member States. The economic climate makes this difficult, but should be seen as an incentive to further focus efforts, both at the national and the European level.

Returning to growth

Both the Annual Growth Survey 2012 and the Council synthesis report contained advice on further action. Let us here quote key points the Danish report made (pages 3-4):

Commitments regarding the objectives on poverty, education, innovation and green growth, in particular, should not be set aside while not endangering rigorous fiscal consolidation.

- Fiscal consolidation efforts have been undertaken by almost all Member States but further efforts appear necessary and, in several countries, medium-term budgetary frameworks remain to be strengthened. Ad hoc measures regarding VAT systems taken by some Member States have yet to produce results. There has only been limited progress across Europe as regards the shift of taxation away from labour. The coherence of the measures taken and their impact on growth and fiscal consolidation also remain to be analysed.

- Efforts to increase competitiveness are still needed, in particular, to increase competition in the retail, service and infrastructures sector. While the transposition of the Services Directive in Member States is progressing, more support needs to give to enhancing crossborder labour mobility including by revision of the EU rules on mutual recognition of professional qualifications.

- Improving the environment in which businesses, including SMEs, operate is important, in particular the reduction of unjustified administrative and regulatory burdens.

- Promoting employment is a key policy objective in all Member States. Nevertheless, in many countries, more could be done in terms of active labour market policies and to combat labour market segmentation and excessively rigid employment protection legislation, reform unemployment benefit systems to make work pay and enhance employability of vulnerable groups. Youth unemployment remains of critical concern. Progress on the inclusion of young people in the labour market is still insufficient in several countries.

- Dual training and other reforms are under way in education systems, but investment in education and training is affected by fiscal constraints in a number of Member States. Ensuring quality of public spending in these areas is a particular priority.

- Pension system reforms have been undertaken in some Member States and are under way in a number of others, but their impact is often hampered by early retirement opportunities and special schemes that are still in place.

- The number of people at risk of poverty is on the rise, and has not been effectively addressed. More focus on increasing labour market participation of vulnerable groups could help address this concern. Some countries still have to take action to address the interrelated issues of household indebtedness and housing markets.

Naturally, the countries with the greatest problems are the ones to need the fastest and most dramatic reform, although their past record is the least promising. However, given the sorry state of the economy in almost all of the EU member states, the need for structural reform in the European Union as a whole is profound.

The national leaders have spoken wisely. Now they must act.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

Breathing life into EU2020 necessary for growth, competitiveness and employment

After the European Council (EUCO) summary we noted a few key points in the intergovernmental Treaty on stability, coordination and governance in the economic and monetary union (TSCG, ”fiscal compact”) before discussing that the national leaders condemned themselves to achieve economic growth, enhanced competitiveness and new jobs within tighter budget limits, practically without money.

With growth stalling, Europe's competitiveness seriously eroded and unemployment rising, more than cheerful rhetoric is going to be needed to turn the tide.

What do the heads of state or government propose to do?

We turn to the three remaining cornerstones in European Council 1-2 March 2012 conclusions (EUCO 4/12, available in 23 languages) to take a look at this Houdini act.


Europe 2020

The political leaders remind themselves and others that the European Union has a comprehensive long term strategy for smart, sustainable and inclusive growth, Europe 2020 (EU2020):

2. "Europe 2020" is Europe's strategy for jobs and growth and its comprehensive response to the challenges it is facing. In particular, the five targets set out for 2020 remain fully relevant and will continue to guide the action of Member States and the Union to promote employment; improve the conditions for innovation, research and development; meet our climate change and energy objectives; improve education levels and promote social inclusion in particular through the reduction of poverty.

Europe 2020 involves the member state in reform work at EU level with regard to the seven flagship initiatives. The institutions of the European Union and the governments of the member states have jointly agreed on common EU2020 targets. Many of the concrete structural, growth-enhancing reforms need to be carried out in and by the EU member states, by state, regional and local actors, social partners and enterprises. The structural reforms at EU and national level are intended to create synergy effects. The five headline targets have been translated into national targets, which take account of the different situations.

By mid-April (the end of April, at the latest) each EU member state sets out its actions in its national reform programme 2012 (NRP). The European Commission analyses every NRP, as well as the stability or convergence programme of every member state, and issues recommendations.

In the summer, the European Council and the Council (of ministers) are going to conclude the planning circle known as the European Semester by addressing recommendations to all the member states.


Divine inspiration?

There are worrying signs that Europe is sliding more than rising. The loss of international competitiveness and export shares in world markets are root causes of this decline, almost across the board.

Difficult but decisive reforms are needed, but rarely do we see signs of lively national debates centred on the Europe 2020 as a dynamic key to reform policies. Preparing mandatory programmes in the recesses of national ministries of economy, perhaps concerting with the main social partners, leads to paper programmes devoid of life.

The heads of state or government have given themselves a reminder of EU2020, but having returned home from the spring European Council, they have to breathe life into the Europe 2020 strategy process domestically.

They failed during the Lisbon strategy decade, and their EU2020 start has been disappointing, with the results we can see around us.

Especially in the member states lagging behind, divine inspiration looks necessary, but failing that the prime ministers and presidents have to make the Europe 2020 strategy a success in their own countries.

The Europe 2020 reforms concern almost all ministries and levels of government and the social partners, but also individual businesses and citizens. The media need to be woken up, if they don't notice themselves.



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

EUCO challenge: growth despite budget balancing

We already looked at the summary offered by the European Council. Since I enjoy the luxury of being able to blog about yesterday's news, I'll try to discuss what EUCO said about economic growth, competitiveness and jobs.

The conclusions of the European Council are available in all 23 official EU languages: in English: European Council 1/2 March 2012 (EUCO 4/12).

After the clear summary, the conclusions start with part I. Economic policy (paragraphs 1-24) and II. International summits (paragraphs 25-28).

Since our leaders do not want to ”burden” us with helpful links or references to the relevant documents, the process of reading becomes slow, even if we only want to hint at the existing official positions.


Stability and consolidation

The first paragraph lays the foundation. I understand financial stability as both a banking sector in working order and as tolerable borrowing costs for governments and enterprises. Fiscal consolidation means smaller budget deficits:

1. The European Union is taking all necessary measures to put Europe back on the path to growth and jobs. This requires a two-pronged approach, covering both measures to ensure financial stability and fiscal consolidation and action to foster growth, competitiveness and employment.

We enter a politically charged area. If deficits are cut, the hovercraft sinks to the ground. It lands on those who have received money from public coffers in some form, including the poor, which in turn slows the rest of the economy.

It may be socially understandable and politically tempting to protest, but do the protestors have real alternatives?

I would like to think there are, but I am afraid I do not see much possibilities this time around.

Between October 2008 and December 2010 the EU member states poured 10.5% of GDP as aid into the financial sector, but problems remain in the banking sector.

Many of the EU governments have no money to spare, and their borrowing is prohibitively expensive.


Alert Mechanism Report (AMR)

Naturally, some can dismiss the EU Commission is part of the same conspiracy as I am, but take the time to read the first Alert Mechanism Report 14.2.2012 COM(2012) 68, which offers a broader view of macroeconomic imbalances than mere budget deficits. (The AMR is available in 22 languages.)


Right or wrong?

Although the first report of its kind, I find the AMR ”family portrait” disturbing as well as essentially convincing, against the background of a clear loss of competitiveness and exports for the EU as a whole.

If we return to the pub discussion level, I would not expect a majority of the EUCO members to be ideologically driven enough to want to slash budgets and gain impopularity just for the fun of it.

At the same time, they have made their own game harder: regaining competitiveness and returning to economic growth, despite efforts to diminish public deficits.

Cold comfort for the jobless, but in my humble opinion, EUCO has made the right basic choice.

What can be done in these circumstances?



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

European Council and Single Market: ambitious enough?

Ahead of the spring European Council, the joint letter from the twelve prime ministers David Cameron (United Kingdom), Mark Rutte (Netherlands), Mario Monti (Italy), Andrus Ansip (Estonia), Valdis Dombrovskis (Latvia), Jyrki Katainen (Finland), Enda Kenny (Ireland), Petr Nečas (Czech Republic), Iveta Radičová (Slovakia), Mariano Rajoy (Spain), Fredrik Reinfeldt (Sweden) and Donald Tusk (Poland) to the president of the European Council (EUCO) Herman van Rompuy and the president of the European Commission José Manuel Barroso was titled A plan for growth in Europe.

This means that fifteen EU member states, among them France and Germany, did not participate in this call for growth policies.


Single Market reform

At the top of the wish list of the dozen premiers came an improved Single Market:

First, we must bring the single market to its next stage of development, by reinforcing governance and raising standards of implementation. The Commission’s report to the June European Council should set out clear and detailed actions needed to enhance implementation and strengthen enforcement.

Action should start in the services sector. Services now account for almost four fifths of our economy and yet there is much that needs to be done to open up services markets on the scale that is needed. We must act with urgency, nationally and at the European level, to remove the restrictions that hinder access and competition and to raise standards of implementation and enforcement to achieve mutual recognition across the single market. We look forward to the Commission report on the outcome of sectoral performance checks and call on the Commission to fulfil its obligation under the services directive to report comprehensively on efforts to open up services markets and to make recommendations for additional measures, if necessary in legislation, to fulfil the internal market in services.

Barroso reply

In the Annex to the Barroso reply we find the following list of ongoing or forthcoming actions:

1. Single Market

a) Commission Communication to the June European Council

This will present recommendations on how to make better use of the existing tools for improving and monitoring implementation of the Single Market, proposals on how to organise annual reporting on the Single Market, including on network industries and proposals on how to improve infringement/enforcement policy.

b) Commission report on the Services Directive and efforts to open up services markets, with recommendations for additional measures

The Commission is currently assessing the quality of the implementation of the Services Directive in all Member States, from an economic and legal point of view and on the operation of the Points of Single Contact and will report on this in the coming months.

c) Commission report on the outcome of sectoral performance checks

We are processing performance checks in 3 key sectors: Tourism, Construction and Business Services, to assess how different pieces of EU legislation applying to services work in practice when taken together.

***

Would you say that the demands or the planned actions are ambitious enough to turn the tide? If they are, in your view, will the needed qualified majorities be found? Is a sea change likely in the EU countries, especially the ones behind the curve?



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. For better or for worse, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (ranked fourth among politcal blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?

European Council and the quest for growth

Some additions have been made to the materials ahead of the European Council 1-2 March 2012, since I described the sewing circle level of governance and pointed at the synthesis report about the implementation of the European Semester.

There is now a fairly meagre background note about the EUCO spring meeting. The invitation letter from president Herman Van Rompuy to the heads of state or government has also appeared, but his thoughts on reforms have not.


A plan for growth in Europe

If we go outside EUCO central, we find some interesting input. Twelve national leaders wrote to Van Rompuy and the Commission president José Manuel Barroso with A plan for growth in Europe (20 February 2012), listing eight priority areas for economic growth and job creation.

This year Barroso, who may have noticed the information vacuum preceding the spring summit, has been busy proselytising the Europe 2020 strategy (EU2020) for smart, sustainable and inclusive growth, as well as related Commission initiatives. He also replied to the EUCO members by a flowery letter (MEMO/12/146), but the birth of pre-summit discussion between the leaders is a small sign of improvement.

The Annex: Overview of state of play on initiatives referred to in the letter 'A Plan for Growth in Europe' offers a factual and useful check-list against the letter of ongoing reform projects aiming at economic growth. Let us lift the eight main headlines from the Barroso Annex:

1. Single Market
2. Digital Single Market
3. Energy
4. Innovation
5. External dimension of growth
6. Reduction of administrative burden
7. Employment
8. Financial sector legislation

Are the leaders prepared to achieve a seamless Single Market, a borderless Digital Single Market and all the rest, or is Europe turning into the new Atlantis?

Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. For better or for worse, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw, Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?

European digital agendas: Wallonia in Belgium

Economic growth is the magic concept to survive and to rebound from the economic crisis. The Europe 2020 strategy (EU2020) and its seven flagship initiatives are intended to bring us smart, sustainable and inclusive growth.

The Digital Agenda for Europe is the information society or ICT strategy, which bundles 101 actions under eight pillars (themes), but they cannot be achieved by the EU Commission alone. The member states are involved in setting policy guidelines, legislation and follow-up. Many actions depend on what the member states achieve domestically.

Thus, we face the question if there are national digital agendas in line with the Digital Agenda for Europe.

Yesterday we glimpsed at Belgium and found the Flanders in Action Pact 2020 (ViA), but I did not yet stumble across a specific digital agenda.


Wallonia

Now we turn to the French-speaking region of Wallonia, where we find the broad initiative Creative Wallonia: Introduction, Trois axes and Documents. The two main documents are the framework programme and the preparatory study:

Programme-cadre Creative Wallonia (undated; 72 pages)

Le rapport de la commission Zénobe (downloadable here; 2009; 111 pages)

The substance covers wide areas of the EU2020 strategy.


Wallonia's ICT strategy

Within this context, more specifically ICT oriented is:

Master Plan TIC (dowloadable here; 16 June 2011; 92 pages)

You can find aa Executive Summary in French, as well as in Dutch, German and English: Executive Summary – ICT Master Plan (downloadable here; 6 pages)

After presenting main ICT trends, the summary offers a roadmap with ten strategic priorities and six major issues briefly outlined.

Finally, there is the Baromètre TIC 2011 – L'usage de technologies de l'Information et de la Communication en Wallonie, with hard facts about ICT usage in the reagion, as well as recommendations by the Agence Wallonne des Télécommunications (AWT) for the future (26 pages).

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If you have updated information about a Flemish digital agenda, or about the central government of Belgium, I am grateful for information. You can comment on this blog post or send me an email. Updates about other national (regional) ICT strategies in the European Union and the European Economic Area are also welcome.



Ralf Grahn
speaker on EU digital policy and law

P.S. 1: For better or for worse, between the global issues and the national level, the European Union shapes our digital future and online freedoms. More than 900 euroblogs are aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?

P.S. 2: The @Avaaz petition for the European Parliament (and the national parliaments) to reject #ACTA has already been signed by 2,315,016 netizens, but more are welcome until the anti-piracy treaty has been officially buried.

Growth and jobs: Denmark's EU Council presidency

Prime minister Helle Thorning-Schmidt and the rest of the Danish government presented the presidency programme Friday:

Europe at work: Programme of the Danish Presidency of the European Union 2012, 1 January to 30 June 2012 (61 pages)

The programme is available in Danish, French and German as well through the presidency web pages.


Priorities

The government of Denmark offers four wide headings as its priorities for the first six months of 2012:

* A responsible Europe
* A dynamic Europe
* A green Europe
* A safe Europe

The introduction presents the themes in a nutshell (pages 4-6), with more detail added for each of them in the general part of the programme (pages 7-22).

I already commented in Swedish (Grahnblawg) on A responsible Europe facing the financial and economic crises in the euro area.

After the macroeconomic section, in this blog post I turn to the second prioroity A dynamic Europe, on pages 10-14.


A dynamic Europe

The catchwords are growth and jobs, and the means include revitalising the single market (the Single Market Act). The reform of the European patent system is mentioned as a concrete measure. A digital single market requires a number of actions.

The Danish government underlines the social dimension(s) of the single market. Simplified rules for public procurement, effective standardisation, as well as better framework conditions for companies and consumers are outlined, together with an internal market for energy.

The next generation of EU programmes for education, research and innovation is treated under the headline A competitive single market for knowledge, which includes the programme Horizon 2020.

Social aspects regarding mobile workers and eHealth have already brought some Danish nuances to the fore, and the same can be seen in relation to the subheading Sustainable growth and development throughout the EU, which gravitates around cohesion policy as an important part of the next long term budget (Multiannual Financial Framework).

The programme takes account of the European Year for Active Ageing and Solidarity between Generations (2012), discussing the health of older people as well as their participation in the labour market. Gender equality and labour market flexibility can be seen as Danish highlights.

Denmark wants to see fewer boys dropping out of school and more young women enrolling in education programmes in growth areas. Legal immigration of qualified labour is seen as essential for the future, as is freer movement for services and workers within the EU.

The programme aims at promoting external trade with the EU neighbourhood and other countries.


Comments

The Danish presidency programme is very much in line with the purposes of the Europe 2020 strategy for smart, sustainable and inclusive growth (although the EU2020 strategy is explicitly named just a few times).

Most Council presidencies have mentioned knowledge, social aspects, labour market flexibility, gender equality, sustainable growth etc., but my feeling is that these are among the areas where the government of Denmark wants to export some of its ideas, solutions and experiences to the European Union as a whole.

Denmark's combination of competitiveness, equality and functioning institutions make it one of the success stories in the light of international comparisons, so most EU countries could profit.

All in all, despite some emphasis with country colouring, the Danish presidency programme gives the impression of being quite mainstream: an honest broker diligently carrying the torch for a period of six months.


Media

Perhaps the next priority, A green Europe, goes a bit beyond that, as the Espacio de Ideas blog by Pau Solanilla comments (in Spanish).

The CTA Brussels Office Blog has reported briefly on the priorities and the Open Europe blog has compared the (slim) presidency budget with others.

On the European Voice, Simon Taylor offered some background to the Danish EU Council presidency: a country outside the eurozone and a government from the left.

If we believe that ”no news is good news”, we can conclude that the Danish presidency has caused few ripples in media dedicated to European affairs. Perhaps Danish design evokes sinister plots much less than it does sleek form and function.



Ralf Grahn

What is the EU doing for growth and jobs?

The European Council has repeatedly endorsed and called for a Digital Single Market, as well as other growth reforms. This quote comes from the conclusions 9 December 2011 (EUCO 139/11; page 1, point 2):

Recalling the key priority areas for growth it identified in October 2011, in particular, the Single Market Act, the Digital Single Market and the reduction of overall regulatory burden for SMEs and microenterprises, the European Council stressed the need to swiftly adopt the measures with the most potential to boost growth and jobs. It therefore supports the principle of a fast-track programme and invites the Council and the European Parliament to give particular priority to the speedy examination of the proposals identified by the Commission, including in its Annual Growth Survey, as having substantial growth potential. It endorses the actions proposed by the Commission in its report on minimising regulatory burdens for SMEs.

In most EU member states the government coffers are empty and for some countries public borrowing (even refinancing) has become prohibitively expensive. Despite the glide into recession, there is scant hope for massive stimulus through state budgets.

Governments are mainly left with the opportunity to undertake qualitative growth reforms, in order to unleash the potential for a return to economic growth, prosperity and job creation. The sooner, the better, but becoming competitive often means breaking societal taboos in the very member states where the reforms have been lagging.

Without going into the substance, here is a compilation of the main EU level programmes to engender growth and new jobs.


Reforms for growth and jobs

Competitiveness is a key concept. For the convenience of readers, here are a few sources regarding proposals and developments to unleash growth potential in the European Union.


Single Market Act

The Single Market Act – twelve levers to boost growth and strengthen confidence – and the latest developments.


EU2020 and flagship initiatives

The Europe 2020 strategy for smart, sustainable and inclusive growth, with seven flagship initiatives:

Digital Agenda for Europe, including the fresh Annual Progress Report 2011 (22 December 2011), where developments regarding the Pillar 1 aim ”A vibrant digital single market” are recorded on pages 2-6.

Innovation Union, including the report State of the Innovation Union 2011; Brussels, 2.12.2011 COM(2011) 849 final

Youth on the Move

A Resource-efficient Europe

An Industrial Policy for the Globalisation Era, including the monitoring report Industrial Policy: Reinforcing competitiveness; Brussels, 14.10.2011 COM(2011) 642 final, or the fuller version including SEC(2011) 1187. Also the European Competetiveness Report 2011.

An Agenda for New Skills and Jobs. Also the report Employment and Social Developments in Europe (15 December 2011), downloadable here.

European platform against poverty and social exclusion. Also the report Employment and Social Developments in Europe (15 December 2011), downloadable here.


Annual Growth Survey 2012

Annual Growth Survey 2012 VOL. 1/5; Brussels, 23.11.2011 COM(2011) 815 final

The four AGS Annexes Progress Report on Europe 2020 (Volume 2), Macro-economic Report (Volume 3), Draft Joint Employment Report (Volume 4) and Growth-friendly tax policies in Member States and better tax coordination in the EU (Volume 5), are downloadable here.


Smart Regulation

The communication Smart Regulation in the European Union, Brussels, 8.10.2010 COM(2010) 543 final, is a part of the Better Regulation strategy. The recent report Minimizing regulatory burden for SMEs - Adapting EU regulation to the needs of micro-enterprises, Brussels, 23.11.2011 COM(2011) 803 final, was endorsed by the European Council, as we saw above.




Ralf Grahn

Stingy EU 2012 budget: 0.98% of GNI

The Autumn 2011 European Economic Forecast from the Commission offers sobering reading about dashed hopes and danger zone entry, but let me pick just a detail. The predicted inflation rate is 3.0 per cent this year and 2.0 per cent in 2012 (against the background of GDP growth for EU-27 of 1.6 and 0.6 per cent respectively).

As we saw, for the German chancellor Angela Merkel and the UK prime minister David Cameron the inflation rate was the limit of the growth of the budget of the European Union for 2012. Both Germany and Britain are off target with regard to the EU stability and growth pact.

The inflation rate was also the focus of the press release from the Council ahead of the Conciliation Committee with the European Parliament.

Since the early hours of Saturday morning we have the outline of the 2012 budget after conciliation, where the member states and especially the net payers railroaded the more active ambitions of the European Commission and the European Parliament:

3126th Council meeting Economic and Financial Affairs (BUDGET) and Conciliation Committee; Brussels, 18 November 2011 (provisional vision, 17016/11)

The end result in a nutshell focuses on concrete expenditure (actual payments):

The Council and the European Parliament, meeting within the Conciliation Committee, agreed to limit the total amount of payments for the 2012 EU budget to EUR 129.088 billion. This corresponds to 0.98% of the EU's Gross National Income (GNI) and represents an increase of 1.86% compared to the EU budget 2011 as amended by amending budget Nos 1-6. The agreed payments increase remains below the latest Commission inflation forecast of 2% for the EU in 2012, meaning that in real terms the agreement is tantamount to a reduction of the EU budget. The EU herewith rally to the important member states' efforts to consolidate national public finances.

The Commission and the EP had requested more on grounds of fighting the economic crisis by active means:

In its position adopted on 26 October the European Parliament requested an amount of EUR 133.139 billion in payments (+5.23% compared to the budget 2011 as amended by amending budget No 1). The Commission proposed for 2012 an amount of EUR 132.739 billion in payments, leading to an increase of 4.9%.

The Council is expected to formally adopt the 2012 budget on 30 November and the European Parliament to vote on 1 December 2011.

You find details of different budget posts in the conclusions and you can watch the video recording (25:38) of the press conference with Jacek Dominik (Polish presidency), budget commissioner Janusz Lewandowski, Alain Lamassoure (EP) and Francesca Balzani (EP).

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Accounting for less than one per cent of total production, hardly the budget of a super state, with total government spending at more than 50 per cent of GDP in the European Union.



Ralf Grahn

Eurozone: Credible Greece?

Each of the Europan finance ministers fights a war for stability (and sustainable growth propects) on the home front, intrinsically linked with the efforts in the other EU member states, at European Union (eurozone) level and globally.

The ministers meet in the Economic and Financial Affairs Council (Ecofin) Tuesday 8 November 2011, after the meeting of the Euro Group this evening, to take stock of developments and to chart a route to safety.

Yesterday, we looked at the background and gaps and filled the Ecofin file with recent EU and eurozone declarations.

There is more drama in the air than most of the ministers, market players and ordinary people would care for. We are all anxiously following Greece.


Greece

According to Bloomberg, the main party leaders George Papandreou and Antonis Samaras have finally agreed to hold talks on a new government, a first step.

A new administration would be sworn in and a confidence vote held within a week if all went well, BBC News Europe reports, quoting a Greek government spokesman. - The cliffhanger is not over yet.

The Greek political leadership has unsettled nerves globally, and trust levels are low. Reuters Canada reports that Asian markets were falling this morning, despite the announcement on coalition talks.

In yet another enexpected move, the Greek government had terminated the contract with the three banks advising on the 50 per cent write-down of Greek public debt (euphemistically called Private Sector Involvement PSI), as reported by Market Watch.

***

From a promise of talks, the Greek population and the world expect a deal on the leader and the composition of a new government, certainty about the ratification and implementation (or not) of the rescue deal and knowledge about the early election.

The caretaker or interim government did not appear before the markets opened.

With or without bankruptcy and with hardships set to continue, the Greek people have to settle on a course of political and economic stability, as well as competitiveness for sustainable growth in the real world of the global economy.

For the time being, most of us – inside and outside - continue to be unwilling passengers on a Greek bus racing along mountain roads with competing drivers.



Ralf Grahn

EU2020: Learning from the best

After the series about the controversial Anti-Counterfeiting Trade Agreement (ACTA), I reported the publication of a new Digital Agenda for Sweden and then took a first look at policy outcomes in Denmark in the light of the competitiveness, growth and employment aims of the Europe 2020 strategy (EU2020). Next we looked at the twelve pillars of competitiveness wisdom, according to the World Economic Forum (WEF).


Learning from the best

We have just scratched the surface of the comparative report on productivity and growth potential globally:

Klaus Schwab (Editor): The Global Competitiveness Report 2011-2012 (World Economic Forum WEF; 527 pages)

Those who are interested in EU2020-related economic reform issues at national or EU level notice that among the 142 countries and territories ranked, the two top positions go to countries outside the European Union.

Switzerland remains the WEF World Champion, most notably with regard to innovation, technological readiness and labour market efficiency, but also due to its strong showing in practically every category (page 11 summary).

Singapore advanced to second place due to its excellent institutions, as well as its efficient goods, labour and financial markets (page 11-12 summary).

The following top ten emerged from the Global Competitiveness Index (GCI) 2011-2012 rankings (page 15):

1. Switzerland
2. Singapore
3. Sweden
4. Finland
5. United States
6. Germany
7. Netherlands
8. Denmark
9. Japan
10. United Kingdom

Instructive summaries follow for the individual countries.

ITIF

Between 2005 and 2011 the United States has declined from first to fifth position, but let us remember the big differences between the states. When the Information Technology & Innovation Foundation ITIF benchmarked innovation and competitiveness in the European Union and the United States, it found many worrying signs for both.

However, ITIF also found that Massachusetts and eight other states are on the top of the world:

Massachusetts, California, Connecticut, New Jersey, Washington, Delaware, Maryland, Colorado, and New Hampshire are more innovative than any nation in the world. Only Finland breaks into the top 10. In other words, nine states lead all nations in the world in terms of innovation-based competitiveness. If it were a nation, Massachusetts would lead the world by a large margin, scoring 18 points above California and 38 points higher than Finland. Massachusetts has set itself apart in several indicators, as the only state or country to have business R&D investment levels over 5 percent of domestic product, over 0.5 percent of domestic product in venture capital, and over two-thirds of its college aged population having a college degree. But even the ninth most innovative state, New Hampshire, leads the EU-25 on all measures but venture capital and broadband.

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For those who work to turn their national reform programme (NRP) or the EU2020 aims into real progress, learning from the best is essential. The WEF top ten and the nine most competitive and innovative US states are among the places to look.



Ralf Grahn