"The Real Global Economy is Intact"

 October 9, 2011

In an unprecedented development, on the 8th of October the three most important business associations in Europe – the French MEDEF, the German BDI and the Italian Confindustria – have launched a joint appeal calling for a deepening of political and economic integration among EU member countries.

The business leaders signing the appeal are thus taking the lead for further EU integration from politicians- the traditional promoters of European unity up until now. In a desire to restore economic growth within the Union, the authors of the appeal consider that a new EU treaty should replace the current one. The work on the new treaty should start in parallel with current efforts to replace the European financial stability facility (EFSF) by 2013. It should provide for further political and fiscal integration, with a view to improve stability and growth, as envisaged by the Maastricht Treaty. The aim of the proposal is to render the EU economically prosperous and politically strong, by improving the performance of all member countries.

The new permanent mechanism due to replace the EFSF by 2013 should, in the authors’ view, be an independent institution capable of assisting EU countries, subject to strict conditions. The competitiveness of EU economies would be improved by a thorough process of economic reforms, avoiding the piecemeal approach that has been the norm so far in countries from southern Europe.

By pointing out that the real world economy is actually intact, the business leaders are convinced that there is no reason to let it slide into another bout of recession, or worse, if only corrective action is taken by politicians in a timely and resolute fashion. Judging by the fact that unemployment in Germany dropped to 6,5 %, the lowest level since reunification, they might have a point (source: Reuters France).