Europe in a complete deja vu

Nieuws | de redactie
27 maart 2012 | “Two exasperating years” Ann Mettler had to live through before the EU got back to its core business: creating sustainable growth. Her Lisbon Council, a leading ‘smart think tank’ in Brussels, did not wait for this moment to arrive and started innovative centers of excellence.

The Brussels based knowledge economy think tank ‘The LisbonCouncil’ derives its name from the ‘Lisbon Agenda’ which in 2000stated the ambition to make the EU by 2010 “the most competitiveand dynamic knowledge-based economy in the world”. That goal wassadly not quite realized.

High time to ask the executive director and co-founder of theLisbon Council, Ann Mettler, whether she still finds it convincingwhen European Commission President Barroso claims that Europe needsto “unleash growth and create jobs,” as he reiterated in his interview with ScienceGuide.EU justtwo weeks ago. Are such phrases worn out or still relevant?

Real substance neglected

Mettler has clearly thought of this question before. To her,there is still a lot of merit in the label of ‘growth and jobs.’But she also offers alternatives: “How about ‘equitable prosperity’or ‘equity and opportunity’?”, she suggests. “I like the notion ofeconomic systems that foster social mobility and meritocracy.Sustainable growth is the prerequisite for that. But by the sametoken, the absence of growth means equitable distribution will notbe sustainable. The bottom line is: We Europeans need to earn ourstandard of living. Sometimes we seem to think that we have somesort of birth right to our living standards.”

“In the current context I am actually relieved that we aregetting back to the debate on growth and jobs”, Mettler continues.”In the last two years we have been totally preoccupied with thefinancial and debt crisis. But short-term crisis management andincessant talk about new economic governance models do nothing ontheir own to stimulate growth and lay a new foundation forprosperity.”

“Honestly, the last two years were at times exasperating for me!The real substance, the growth and job-goals, the widertransformation towards a knowledge-based economy, were oftenneglected.”

“We have always said: the EU has to be able to do twothings at the same time. Work on budget constraints, on the fiscalcompact, the day-to-day crisis management. And on the other hand totackle the underlying problems: the lack of growth, the highunemployment, particularly among the young, the laggingcompetitiveness in many EU-countries and sectors. Because these arethe reasons why budget deficits have grown so large in the firstplace!”  

“On the one hand, I’m glad that the topics ‘growth and jobs’ areback on the agenda. On the other hand, for me it was a completedéja vu-moment  when the EU rediscovered growth and jobs inthe last couple of months. I thought: ‘hello….where have you been?’We’ve really come full circle on this one.”

Barroso is not the problem

Does the problem of this ‘ total preoccupation’ with the shortterm crisis point lie with the European Commission and inparticular with President Barroso? Ann Mettler strongly deniesthis. “When he renewed the Lisbon Strategy in 2005 he was severelycriticized for his supposed neglect of social cohesion. But he waspurposefully misunderstood. Be sure you quote me right: purposefully misunderstood. By those interests that stilllike to believe that economic goals inevitably come at a social andenvironmental cost — as if you had more social cohesion and jobsor a better environmental performance you somehow cripple andsabotage the economy.”

“The very opposite is the case: you see that the countries withthe highest growth rates also have the highest degree of socialcohesion. In Sweden for example they have pretty strong growth andthey still are the champions of social equity.”

Ann Mettler is glad that the depth of the impact of the crisiswoke us all up from the state of complacency Europeans have been infor so long. “You meet a deeper understanding now that the crisisis real, here to stay even and that we cannot continue running upour deficits with the low growth rates we have. I’m so relievedthat former complacent attitude is over.”

Growth and jobs: 99% of all firms are SME’s

So Europe is really back to growth and jobs, but then what’snext? Mettler still pushes the insight that the EU has importantlevers to foster economic growth. For instance, the internal marketcontinues to be too fragmented, particularly in the areas ofdigital economy, energy and services. Or take the next multiannualfinancial framework, where there is a real chance to redirect EUfunding towards more future-oriented investment, in highereducation, in R&D, in innovation. In the meantime, the LisbonCouncil is taking matters of economic growth, innovation andcompetitiveness in its own hands by setting up various centers ofexcellence.

“One center of excellence, for instance, focuses on theimportance of SMEs in the singlemarket“, she explains. “99% of all firms are SME’ s and 90% ofthem are so-called micro-enterprises, meaning they employ fewerthan 10 people. Between 2002 and 2010, 85% of total employmentgrowth was driven by SME’s. Their importance cannot be overstated!But how can we empower these companies and give them the tools tobecome more competitive and successful?”

In trying to answer these questions, Ann Mettler recentlyco-authored a paper on the rise of the ‘Micro-Multinational’, “where I examine how technology has the potential totransform small organizations by providing global reach, increasingproductivity and unleashing innovation.”

Mario Monti as an epitome

The second center of excellence the Lisbon Council launchedfocuses on the ‘Government of the Future’. “How can governments betransformed to become more citizen-centric? Going even further, cancitizens perhaps even co-create public services? How can weinnovate public services and help prepare them as citizens for ourgrand challenges, such as the ageing of our societies, the need toraise our game with regards to skills and human capital, theurgency of responding to climate change. For instance by offeringsmarter mobility options.”

Two more centers of excellence are under construction. Is’European leadership’ maybe one of those themes? Mettler neitherconfirms nor denies. She does admit she is fascinated by thecurrent developments in Italy and Greece, where ‘technocrats’ havetaken over from democratically elected politicians.

“It is ironic that Mario Monti carries out all the reformsnecessary with a view to strengthen the economy for the long-run.Making it possible for women and young people to participate in thelabour market, making the social system more sustainable by raisingthe retirement age. Finally tackling the vested interests andincumbents that have stifled entrepreneurship and economic dynamismfor too long.”

“He is the epitome of an ideal politician and it is interestingto see that he continues to enjoy strong popular support. But thefact is that he has not been elected. That’s a very interestingphenomenon for someone like me who has studied the dynamics of thepolitical economy of reform for over a decade.”

Literacy of adult citizens

“The root of the problem lies in the fact that many politiciansdon’t treat their citizens as mature adults who deserve to be toldthe truth about current and future challenges. Instead, they treatthem like children who somehow need to be shielded fromuncomfortable realities. But guess who is footing the bill whenthings go wrong? It’s the citizens of course. We are nowcollectively paying a high price for the economic mismanagement -and misinformation – of past years and decades.”  

“That is why citizens need access to better information when itcomes to underlying economic and financial fundamentals. And thisis why it’ s so necessary to boost economic and financial ‘literacy’  across the board. I honestly find it curious thatin Spain for instance, you see people taking to the streets,protesting against labour market reforms, while they experience alevel of 24% in unemployment and almost 50% in youthunemployment.”

“I mean, how bad does this have to become?  Howdisastrous, before people realize that the current system is notworking? Especially when there are countries that have a strongrecord on social cohesion and that perform much better. Look atGermany, which is currently enjoying the lowest unemployment ratesince reunification.”

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