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Europaudvalget 2010-11 (1. samling), Det Udenrigspolitiske Nævn 2010-11 (1. samling)
Det Europæiske Råd 24-25/3-11 Bilag 3, UPN Alm.del Bilag 111
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Herman Van Rompuy

President of the European Council

José Manuel Barroso

President of the European Commission

18 March 2011

GETTING EUROPE GROWING

The world is emerging from one of the greatest economic shocks of modern history. In

countries the world over, citizens and businesses continue to feel the consequences of the

deepest global recession since the 1930s. In Europe, the pain has been particularly acute.

Across the EU as a whole, four years of annual growth have been wiped out. Unemployment

has risen to double digits. And with one in five young persons unable to find a job – more

than 5 million people in total – we risk a lost generation of European workers.

We ignore these risks at our peril. For while reform is underway, recovery has begun, and

some countries have experienced a robust return to growth, the European economy as a

whole faces major challenges from other developed regions. Last year, while world growth

reached pre-crisis levels, EU average growth was little more than half its pre-crisis rate.

According to the IMF, the EU overall is expected to grow more slowly than most other

advanced economies and all of our major competitors over the next five years. Tellingly, the

excellent Annual Growth Survey of European Commission puts Europe’s growth potential at

just 1.5 per cent a year over the next decade, and just 1.25 per cent in the Euro-zone. Events

in financial markets underscore the urgency of our growth and competitiveness challenge.

Europe has many economic assets – a skilled and able workforce; the world’s largest

consumer market; an open, trading culture; a proud record of invention. But at this critical

point in our history we face major economic challenges. Despite the efforts we have made,

without stronger ambition and fundamental reform – to unleash enterprise, open markets and

promote innovation, including in green technologies – we face a future of low productivity,

high unemployment, lost investment and relative economic decline.

Each of us believes firmly that we can achieve strong and dynamic growth in Europe – that

with common purpose and resolve we can overhaul our outdated growth model and tear down

the barriers to future prosperity. We have recognised in the Europe 2020 strategy that there is

much the Member States can do to stimulate long-term growth. It is essential that all of us

rise to the challenge with ambitious and far-reaching national programmes of reform.

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We have recognised too that growth will not come for as long as national finances remain in

a perilous state. Putting public finances on a sustainable footing and promoting growth are

not alternatives. We cannot delay the first to achieve the second – without fiscal discipline

we will not lay the foundations for strong and sustainable growth in the future. And so tough

decisions are needed – to cut back on waste, spend more wisely, and reduce our debts while

investing in growth. We need swiftly to reach agreement on a stronger Stability and Growth

Pact. Above all, we must stick to the course that we have set, recognising that growth will be

supported, not in spite of these decisions, but because of them.

So the actions we are taking at home are essential to the EU’s prospects for growth. It is to

our collective benefit that they should succeed. But it is vital too that we make full use of the

instruments of the European Union to achieve competitiveness and growth. We need an EU

budget which addresses the challenges of tomorrow. And at our meeting in Brussels later this

month we must begin to set a new direction for Europe and agree to take action on four key

priorities.

First, we must deliver the full and untapped potential of the Single Market. The Single

Market is Europe’s greatest economic achievement – the core foundation of the world’s

largest economy encompassing 500 million consumers and €12 trillion of economic activity.

But it is far from finished business.

Services now account for almost four fifths of our economy and yet there is much to be done

to open up services markets on the scale that is needed. While significant efforts have been

made to put in place the provisions of the Services Directive, many sectors still remain closed

off by opaque, disproportionate and disparate regulation. Restrictive practices are rife. And

implementation overall falls far short of what is needed to open up markets fairly to

competition. So we must do for services markets what we have done for markets in goods –

removing the restrictions that hinder access and competition, reducing the number of

regulated professions, and making a firm commitment to implementation and enforcement,

building on and extending the mutual evaluation process and publishing scorecards of

national performance. Succeed and we could add €140 billion to the European economy.

We welcome the commitment given by the Commission in its Annual Growth Survey to take

action in this area and invite the Commission to report at the earliest opportunity on the steps

needed to realise these gains.

And because growth in the future will depend more and more on the effective exploitation of

information technology, we must also build a truly digital Single Market. The digital

economy is expanding rapidly but cross-border online trade remains stubbornly low. So we

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must act to provide businesses and consumers with the means and the confidence to trade on-

line, including by overhauling the current arrangements for e-commerce, building an efficient

cross-border framework for copyright and establishing clear and transparent consumer rights.

We ask the Commission to table rapidly bold and ambitious proposals to achieve these aims

so that a fully functioning digital Single Market is in place by 2015.

Finally, we must also complete the internal energy market, put in place smart, upgraded and

fully interconnected transport and energy infrastructure, and strengthen our efforts to develop

common EU standards and labelling requirements for energy and environmental products.

As we build a genuine Single Market in Europe, our second priority must be to open up and

connect European and global markets. There is no greater prize in world trade than the

conclusion of the Doha round. We must all now recognise that 2011 is the make or break

year for Doha and the EU must do all it can to facilitate a deal. We urge all of the main

negotiating countries to intensify their efforts in order to finalise the round.

But there is much more we can do at the same time. Last year the EU signed a Free Trade

Agreement with South Korea, worth more than €30 billion to European exporters. We must

now show the same level of commitment and ambition to conclude deals with India, Canada,

Japan, Mercosur and the ASEAN nations. We believe that these deals can and should be

completed by the end of the current Commission term and we call on the Commission and the

European Council to take all steps necessary to ensure that this happens. Closer to home,

deeper economic integration and wider market access between the EU and countries in the

Eastern Partnership and the Southern Mediterranean would not only benefit the EU, but

would support and encourage sustainable economic and political development within those

countries too. We urge that progress should be made on the basis of a differentiated and

incentive-based approach.

The third priority is a new drive to support business and unleash enterprise. We need to make

it easier for businesses to start up, develop and prosper. And we need to start by recognising

a simple fact – our economies cannot and will not be competitive if we continue to load ever

greater regulatory costs onto the shoulders of business.

What is needed is a change of mindset and of culture – a new approach to regulation, which

builds on but extends significantly what we have achieved with the support of the

Commission to date. So we should set a target to reduce the overall burden of EU regulation

over the life of this Commission, building on the steps we have taken to reduce administrative

costs. We should seek to ensure that new burdens on business are offset by savings

elsewhere. We should give small businesses exemptions from regulatory burdens when they

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face disproportionate costs of compliance. And we must demand that all impact assessments

are clear on the implications for growth and competitiveness. We should also improve the

efficiency of EU budget programmes. We ask that all institutions unite in helping to deliver

these steps and invite the Commission to present proposals by the summer for putting them

into practice.

Our fourth priority is innovation. A strong and competitive European economy must be built

on creativity, new ways of working and the ability to capitalise on new market opportunities,

such as those in low emission technology. A well functioning internal market is a

prerequisite for innovation, but there is more we must do. We must take full advantage of

Europe’s intellectual capital to drive innovative activity. And we must increase access to

finance as we seek to create a larger, more fully integrated European venture capital market

capable of supporting greater investment in new and innovative products. To be truly

successful, however, we must also break the deadlock on an EU patent to ensure that firms

have access to affordable, continent-wide intellectual property protection in a system free of

all unnecessary legal complexity. We look forward to receiving a proposal from the

Commission and hope that a new system can be agreed by the end of the year.

To conclude, Europe stands at a junction. Before us lie two very different paths – a path of

least resistance, built on the policies of the past and reinforcing economic decline; and a new

direction for Europe, based on the priorities described here, and leading to stronger growth

and prosperity. We welcome the action already taken in these areas and the commitment of

the Commission to drive progress, and urge you and the European Council to endorse these

priorities. We support the forthcoming Polish and Danish Presidencies in enforcing this

growth agenda for the benefit of the whole of Europe.

We are copying this letter to colleagues on the European Council and to the President of the

European Parliament.

David Cameron, Prime Minister of the United Kingdom

Mark Rutte, Prime Minister of the Netherlands

Fredrik Reinfeldt, Prime Minister of Sweden

Lars Løkke Rasmussen, Prime Minister of Denmark

Mari Kiviniemi, Prime Minister of Finland

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Andrus Ansip, Prime Minister of Estonia

Donald Tusk, Prime Minister of Poland

Dalia Grybauskaitė, President of Lithuania

Valdis Dombrovskis, Prime Minister of Latvia