Europe Unlocked welcomes the sense of urgency injected into the debate about Europe’s competitiveness at this week’s European Council, and in particular it supports efforts by former Italian premier Enrico Letta to strengthen the EU’s Single Market.

Dr Letta is right to point out that Europe is falling worryingly behind its main trading partners in terms of GDP growth per capita, and we agree that now may be the “last window of opportunity” to put this right.

The report he presented to EU leaders on Thursday contains many good ideas that will, if supported by EU leaders, help restore the continent’s economic prospects, and create a better environment for European businesses to flourish.

A proposed 5th freedom to enhance research, innovation and education in the Single Market could help to leverage the innovative capabilities that Europe has but which historically have not translated into significant competitive advantage. Similarly, Dr Letta’s proposal to streamline the decision making process for agreeing trade deals with third countries would help Europe to grasp the opportunities offered by fast growing economies outside of Europe.

However, some of Dr Letta’s ideas appear to repeat the mistakes of recent years by calling for more public money to restore Europe’s economic fortunes. Commenting on this point, Executive Director of Europe Unlocked, Kieran O’Keeffe said:

”Calls in Mr. Letta’s report for a “progressive expansion of EU level funding” as a trade-off for stricter state aid control detracts from the need for a relentless focus on improving the business case for private investment in Europe.

“Amongst other things, this will require a stable, clear and enabling regulatory environment and a reduction of existing points of friction in cross-border trade for goods and services.

“Europe needs a market-driven approach to its economic revival if we want to secure our long-term prosperity and simply spending our way to economic success won’t cut it”.

Nevertheless, Dr Letta’s report appears to have hit a nerve among EU leaders.

“We’re pleased that Member States are now putting political momentum behind the competitiveness agenda and acknowledging the importance of addressing Europe’s shortcomings in productivity performance compared to other regions of the world,” Mr O’Keeffe continued.

“At the heart of this has to be a big push to deepen the Single Market and we’re heartened that both the Summit Conclusions and Mr. Letta’s report share this thinking with calls for a new strategy and a focus on addressing barriers to the cross-border provision of services. Combined with calls for better regulation, these commitments are positive ingredients for future economic success,” he said.