Economic surveys and country surveillance

Economic Survey of the European Union 2012

 

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The EU needs to tackle the economic crisis and move to stronger, fairer and cleaner growth. The EU27 economy is in a serious downturn driven by the euro area sovereign debt crisis and on-going weaknesses in the wake of the financial crisis as set out in the Economic Survey of the Euro Area. Longer-term prospects are for growth to be weaker than over the past twenty years, influenced by population ageing and sluggish productivity gains. Structural weaknesses in labour and product markets contribute to low productivity and employment, as well as slow growth. Higher growth would help to make current debt levels more sustainable and create more space to deal with social and environmental challenges.

An ambitious programme of structural reforms is needed. Removing policy obstacles to growth requires a broad range of measures to raise productivity and employment rates. The EU has set itself ambitious targets with the Europe 2020 strategy. Many of the necessary reforms require changes in national policies and institutions. EU policy instruments can make a strong contribution to growth by creating the right conditions and incentives to support national reforms. Improving EU and co-ordination of national innovation policies, as well as continued opening of EU markets to trade, would also help support sustainable growth.

Strengthening the Single Market should be at the centre of EU policy action to boost growth. Trade integration is lower than within a large federal economy such as the United States and price differences across countries remain high. The EU’s internal market remains fragmented in terms of trade and financial integration contributing to keeping average firm size low in Europe which contribute to low productivity growth. The main obstacles are market regulations at national level and poor implementation of existing Single Market requirements. The Commission sought to re-launch the Single Market project with the 2011 “Single Market Act” Communication. The twelve key legislative actions it identifies should be passed by the end of 2012 as planned. Greater political commitment is needed to the scope of the Single Market project, which could be encouraged by a stronger evidence base and more innovative approaches to decision-making. Implementation of the Single Market, including the Services Directive, should be improved and more actively enforced by the Commission and within countries. The framework conditions for cross-border business should be improved, including by addressing cross-border corporate and indirect tax issues, and stronger implementation of competition policies and consumer protection at the national level. Further integration efforts are required on a sectoral basis for government procurement and the network industries, including through developing cross-border regulators and investment in infrastructure.

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Labour market reforms would create more and better jobs. Large differences in labour market outcomes across EU countries suggest that performance could be improved. High unemployment, particularly among young people, and low labour mobility coexist with skill and labour shortages in other regions. Labour mobility within the EU can help to meet labour market shortages. However, mobility is hindered by barriers stemming from restrictive domestic labour market and pension policies, and by weak enforcement and implementation of legal rights under the Single Market. The recognition of professional qualifications across the EU should be further developed and the access to public sector jobs improved. Reforms at national level to pension systems and housing policies, which would be beneficial in their own right, are an opportunity to tackle disincentives to worker mobility.

EU migration policy needs to be further developed to better respond to shortages of workers. With demographic changes underway, most EU countries expect growing shortages of skilled labour or workers in specialised activities. This should be mostly dealt with by making better use of the existing population and providing them with the right skills. The EU should develop policies to ensure that migration responds more directly to labour market needs. The Blue Card should be used effectively to make it more attractive to high-skilled workers.

 

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The complete edition of the Economic Survey of the European Union is available from:

 

Additional information

For further information please contact the European Union Desk at the OECD Economics Department at eco.survey@oecd.org.

The OECD Secretariat's report was prepared by Sebastian Barnes, Charlotte Moeser and Jon Pareliussen under the supervision of Piritta Sorsa. Research assistance was provided by Isabelle Duong.

www.oecd.org/eco/surveys/eu

 

 

 

Countries list

  • Afghanistan
  • Albania
  • Algeria
  • Andorra
  • Angola
  • Anguilla
  • Antigua and Barbuda
  • Argentina
  • Armenia
  • Aruba
  • Australia
  • Austria
  • Azerbaijan
  • Bahamas
  • Bahrain
  • Bangladesh
  • Barbados
  • Belarus
  • Belgium
  • Belize
  • Benin
  • Bermuda
  • Bhutan
  • Bolivia
  • Bosnia and Herzegovina
  • Botswana
  • Brazil
  • Brunei Darussalam
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Cape Verde
  • Cayman Islands
  • Central African Republic
  • Chad
  • Chile
  • China (People’s Republic of)
  • Chinese Taipei
  • Colombia
  • Comoros
  • Congo
  • Cook Islands
  • Costa Rica
  • Croatia
  • Cuba
  • Cyprus
  • Czech Republic
  • Côte d'Ivoire
  • Democratic People's Republic of Korea
  • Democratic Republic of the Congo
  • Denmark
  • Djibouti
  • Dominica
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Equatorial Guinea
  • Eritrea
  • Estonia
  • Ethiopia
  • European Union
  • Faeroe Islands
  • Fiji
  • Finland
  • Former Yugoslav Republic of Macedonia (FYROM)
  • France
  • French Guiana
  • Gabon
  • Gambia
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Greenland
  • Grenada
  • Guatemala
  • Guernsey
  • Guinea
  • Guinea-Bissau
  • Guyana
  • Haiti
  • Honduras
  • Hong Kong, China
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iraq
  • Ireland
  • Islamic Republic of Iran
  • Isle of Man
  • Israel
  • Italy
  • Jamaica
  • Japan
  • Jersey
  • Jordan
  • Kazakhstan
  • Kenya
  • Kiribati
  • Korea
  • Kuwait
  • Kyrgyzstan
  • Lao People's Democratic Republic
  • Latvia
  • Lebanon
  • Lesotho
  • Liberia
  • Libya
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macao (China)
  • Madagascar
  • Malawi
  • Malaysia
  • Maldives
  • Mali
  • Malta
  • Marshall Islands
  • Mauritania
  • Mauritius
  • Mayotte
  • Mexico
  • Micronesia (Federated States of)
  • Moldova
  • Monaco
  • Mongolia
  • Montenegro
  • Montserrat
  • Morocco
  • Mozambique
  • Myanmar
  • Namibia
  • Nauru
  • Nepal
  • Netherlands
  • Netherlands Antilles
  • New Zealand
  • Nicaragua
  • Niger
  • Nigeria
  • Niue
  • Norway
  • Oman
  • Pakistan
  • Palau
  • Palestinian Administered Areas
  • Panama
  • Papua New Guinea
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Qatar
  • Romania
  • Russian Federation
  • Rwanda
  • Saint Helena
  • Saint Kitts and Nevis
  • Saint Lucia
  • Saint Vincent and the Grenadines
  • Samoa
  • San Marino
  • Sao Tome and Principe
  • Saudi Arabia
  • Senegal
  • Serbia
  • Serbia and Montenegro (pre-June 2006)
  • Seychelles
  • Sierra Leone
  • Singapore
  • Slovak Republic
  • Slovenia
  • Solomon Islands
  • Somalia
  • South Africa
  • South Sudan
  • Spain
  • Sri Lanka
  • Sudan
  • Suriname
  • Swaziland
  • Sweden
  • Switzerland
  • Syrian Arab Republic
  • Tajikistan
  • Tanzania
  • Thailand
  • Timor-Leste
  • Togo
  • Tokelau
  • Tonga
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Turks and Caicos Islands
  • Tuvalu
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • United States
  • United States Virgin Islands
  • Uruguay
  • Uzbekistan
  • Vanuatu
  • Venezuela
  • Vietnam
  • Virgin Islands (UK)
  • Wallis and Futuna Islands
  • Western Sahara
  • Yemen
  • Zambia
  • Zimbabwe