THECITYUK CALLS ON EUROPEAN PARLIAMENT AND COMMISSION TO SET AGENDA FOR JOBS AND GROWTH
Ahead of the European Council’s discussions on jobs, competitiveness and growth at its upcoming meeting on 20 and 21 March, in a new report to be published in Brussels, TheCityUK is calling on the incoming European Parliament and Commission to harness the power of Europe’s thriving financial services sector to help boost the European economy.
As David Cameron and other Heads of Government gather to discuss the importance of a strong and competitive European industrial base as a driver for economic growth, the report highlights how financial services can contribute to Europe’s jobs and growth agenda by focusing on services-oriented growth, an area where Europe has a competitive advantage over other economies.
TheCityUK’s Finance for Jobs and Growth in Europe report, developed with the City of London Corporation through their joint International Regulatory Strategy Group (IRSG), aims to help set the growth agenda for the next mandate of the European Parliament and Commission. It highlights economic and societal challenges—among them high youth unemployment, sluggish forecast GDP growth and an ageing population—and calls on policymakers to focus on growth enhancing policies.
Challenges faced by Europe highlighted by the report include: -
- In the 18 Eurozone countries, in 2013, 24 million or nearly one quarter of Europe’s young people are not in employment, education or training
- Real GDP % growth in Europe over 2012 to 2017 is projected to be only two-thirds that of the United States and well behind the BRIC countries – with the Eurozone at 1.8%, USA 2.7%, China 8.8%, India 7.2%, Brazil 4.4% and the Russian Federation at 4.2%
- Between 1950 and 2050, European population aged between 15-59 as a share of the total will fall by 12%, while the proportion of over 60s share will rise by nearly twice that rate.
Through a series of case studies spanning business sectors and the geography of Europe, the new report demonstrates the crucial role the finance sector can play in resolving these challenges through driving exports, developing infrastructure, delivering retirement income and boosting Europe’s global competitiveness.
With the post crisis financial regulatory reform agenda now entering an implementation phase, the report also marks the beginning of a new dialogue between the financial sector and policymakers – calling on regulators to move on from a focus on strengthening regulation to a renewed emphasis on regulation that harnesses the full potential of financial services to deliver jobs and growth.
In summarising its EU Agenda for Growth, the report urges the European Parliament to prioritise specific policy areas to overcome the challenges the region is facing to increase EU global competitiveness:
- Removing the restrictions that prevent pension funds from investing in high growth markets and infrastructure projects
- Promoting alternative sources of finance for businesses, especially securitisation
- Completing the Single Market in financial services
- Defragmenting the Digital Single Market
- Assessing legislation more rigorously for its impact on growth.
Chris Cummings, Chief Executive of TheCityUK said: “Our report clearly demonstrates that the financial services sector has a vital role to play in resolving the major challenges that Europe and its leaders are now facing.”
“Businesses rely on the financial system to finance business growth, provide supply chain finance and insure against risk, but these services are not always visible. Our guide is designed to show the complex financial infrastructure that exists behind these services and how different types of funding help businesses to grow.”
“Promoting growth and tackling unemployment should be the primary objectives of the 2014 – 2019 mandates. Significant progress has been made to strengthen the regulation of the financial sector, however a stable financial system alone will not be sufficient to drive jobs and growth – this will come from businesses that have the confidence to invest and hire more staff. Creating a regulatory and policy environment in Europe that encourages growth – and allows the finance sector to play its part – must now take priority.”