Economic Discussions in Brussels

Very early morning in order to get to Brussels for a number of things, but notably for the big Brussels Economic Forum.

My prime task is to chair its discussions on enlargement tomorrow afternoon, but I did attend also some of the sessions today. It was worth the time.

Mario Monti, who escaped being recruited to the new Italian government, was as usual highly critical of some of the core European countries in his remarks.

He dealt in particular with the relationship between the single market and the single currency, and argued that while those in the single currency need more of single market than the others, it now looked as if it is developing in the opposite direction.

It’s in reality the non-Euro countries that are better at implementing the single market legislation than are those of the Euro area. While there was previously talk of a single market in search of a currency, there is now the risk that we will see a single currency in search of a single market.

And this will of course feed rather well into the discussions at my session tomorrow. i will argue that the dynamism of the European economy today is coming from the new rather than from the old members, and that we have every reason to proceed with enlargement.

Much of the emphasis of the discussions were indeed on the importance of the single market and the openness to competition.

The head of McKinsey made clear that there is nothing as effective as the white heat of competition in driving innovation and growth in productivity.

Indeed, this is exactly what their recent study on Sweden illustrate.

There is a lesson for all of Europa in that.

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