Skip to comments.Red tape 'turning best firms away from Europe' [Europe circles the bowl, Part XXXVI]
Posted on 01/21/2006 1:48:36 PM PST by John Jorsett
Europe's most successful companies are turning their backs on EU markets because of red tape, a high-level report said yesterday.
The companies that Europe needed to survive were instead investing more money than ever in the United States and Asia, concluded the report, presented to the European Commission in Brussels.
The lack of investment was so dire that it threatened Europe's "comfortable" way of life. "Europe has to act before it's too late," said the report's author, Esko Aho, the former prime minister of Finland.
The findings made unsettling reading for the EU leaders, ripping into their pledges to build a "knowledge-based Europe" that would overtake America in 10 years.
The reality was the opposite. Not only were US, Chinese and Japanese firms outspending Europe on research and development, the gap with Europe was growing.
Perhaps most damagingly, Europe's most important countries were pouring more and more of their technology investment overseas, as they despaired of the European Union becoming "innovation friendly".
Unless EU governments took bold action to increase spending on research, freed labour markets so skilled workers could move more easily, and stopped pouring taxpayers' money into dying industries, Europe's post-war way of life was doomed.
The report said: "Europe must break out of structures and expectations established in the post-Second World War era that leave it today living a moderately comfortable life on slowly declining capital.
"This society, averse to risk and reluctant to change, is in itself alarming but it is also unsustainable in the face of rising competition from other parts of the world. For many citizens without work, or in less-favoured regions, even the claim to comfort is untrue."
Mr Aho refused to follow the lead of French or German politicians, who have attacked major corporations for investing overseas and called for more "economic patriotism".
He said: "We cannot blame them. They are trying to take care of global competitiveness. Unfortunately, these companies can survive without Europe, but Europe cannot survive without these companies. That is why Europe has to act before it's too late."
His report listed a string of gloomy indicators. In 1992, six out of the 10 top-selling pharmaceuticals were produced by European companies. In 2002, this figure had fallen down to two. European firms invested billions more in the United States than US firms invested in Europe.
The report called for better access to venture capital funding to finance innovative companies and more movement between universities and business. The total pool of risk capital investment spent in Europe had shrunk by 90 per cent since the height of the information technology boom in 2000.
European governments were criticised for continuing to pour state aid into dying industries such as cars, steel and textiles. As part of the so-called Lisbon agenda of 2001 EU leaders committed themselves to spending three per cent of their gross domestic product on research and development.
Halfway through the 10-year Lisbon agenda programme, the EU still spent a meagre 1.9 per cent, far behind the US or Japan.
The commission recently predicted that China, for long seen a source of nothing more than basic manufacturing, is spending so much on higher education and research that it would itself overtake the EU on research spending by 2010.
In productivity, the report noted that Europe badly needed to extract more productivity from each worker.
Great article, should be required reading in Econ 1 at Harvard & Yale.
I can't figure out why the more intelligent European countries don't simply pull out of the stupid organization. It's a disaster for them all.
Socialism kills innovation? Who would have imagined this possible?
It doesn't matter anyway. Europe is busy aborting itself out of existence anyway. The population of native Europeans will essentially vanish in 75 years, due to the horrifically low birth rates.
About the only nation in Europe that has the right idea is Ireland, with its 12.5% basic corporate tax rate. Since Ireland has full access to the EU, American companies that do business in Europe just incorporate there and use it as a base for the rest of Europe. Meanwhile, Germany, France, and others sit around wondering why they can't attract any business...
I am too mature to gloat. Wait, guess not.
And we know perfectly well who will replace them.
LOl! Oh, my God. LOL!
These people are outright delusional!
The indoctrination has become so ingrained that they simply cannot understand that Socialism cannot trump free market Capitalism. Ever.
Overtake America. LOL!
Get John Kerry on the job! HE'LL give those EUropen Benedict Arnold companies what for!
"Europe has to act before it's too late," said the report's author, Esko Aho, the former prime minister of Finland.We've gotta protect our phoney-baloney jobs, gentlemen...
Last year I was flying home from Europe and my seatmate was a young Swedish engineer. He was abandoning Sweden with its high taxes and bureaucracy for a job in Atlanta. He's not the only one.
or those like me, who are planning to get out.
Good for you for planning on getting out. My brother-in-law came to the U.S. from the Netherlands in 2000 and loves it here. Two of his sisters are also planning on making the move.
More likely their anti-trust laws and their labor laws.
...and, the 'spin-offs' will be there too.
Overtake America. LOL!
Before we cast an eye on the prevalent socialism (marxism) in Europe, we'd do better casting an eye on the marxists in our own government.
If you think or believe there aren't many in our own Senate and House of Representatives who don't long for the same thing, you have not been paying attention....."We are going to take things from you........for the betterment of the...." (Can't recall the exact words...)...-Hillary Clinton.
Ten years ago, I put great store in the EU. I never guessed it would become like the Soviet Union. Everything that the hand of social;ism touches, withers or dies.
You can't fire anyone. If you declare bankruptcy, you are still responsible for paying your employees. If you leave the country to avoid salary liabilities, it becomes a criminal matter.
35 hour workweek is the most you can work. Anymore, the "boss" gets in trouble with the law. The idea behind this law was if less people are working full time, then more people will get hired. It didn't work. Foreign companies got scared off and unemployment went higher.
Six weeks of vacation. 3 years paid maternity leave. And business must hold job when she returns to work. Employees get reimbursed for cost getting to work. Since the employees have no threat of job loss, they are not motivated to work. This might explain why the French have lousy waiters.
I concluded from the article that you must be INSANE to start a business in France. And no wonder unemployment is so high. How come these pin-heads don't understand human nature?