EU to outline reform plan

Agence France Presse

Brussels, February 2:

The European Union executive was expected later today to outline a new long-term plan for economic revival that will focus on business-friendly policies rather than social protection.

The plan, while urging EU governments to accelerate reforms to their labour markets and to cut red tape, will ditch the EU’s long-stated ambition of forging the “world’s most dynamic economy” by 2010, sources told AFP.

European Commission president Jose Manuel Barroso told the Financial Times that he planned a series of pro-business initiatives including an emphasis on research and development.

“We need at least one Massachusetts Institute of Technology,” Barroso said. “The one thing that strikes me is that the best researchers aren’t in Europe.” Attempts would also be made to reduce barriers within the EU for service industries, which can make it difficult for professionals to cross borders.

Another pledge was to look afresh at a draft law imposing stringent environmental controls on the chemicals industry “to avoid creating unnecessary problems in terms of competitiveness”.

The so-called “REACH” directive on chemicals has been welcomed by environmentalists but condemned by industry, which claims it shows that Brussels remains wedded to its statist past.

The Barroso plan to revive the EU’s “Lisbon Strategy” of economic reform would appear to mark a break with that past, and as such has been attacked by left-wingers for ditching environmental and labour safeguards.

But an unapologetic Barroso reiterated his scepticism about subsidy-supported “European industrial champions”, as favoured by France and Germany among others. Instead he emphasised his belief that EU money should be diverted from such national giants to smaller, competitive firms.

“There is a tendency in Europe, faced with increased competition from other parts of the world, to go for interventionist policies. I’m not against European champions, but they must come out of competition,” he said.

“When public authorities choose champions they usually waste public money — they get it wrong.” The former Portuguese prime minister also dropped a strong hint that the troubled 2010 target for Europe to overtake the US in the competitiveness stakes will be dropped. “We should avoid slogans that put at risk the credibility of the whole exercise.”