EUROPE ISN'T WORKING
The following facts were not provided by a Euro-sceptic MP. Much of this article is based on a report from UNICE, a European employers' federation, which - if anything - is very pro-EU.
Britain joined what was then the EEC in 1973. Since the 1970s there has
A relative drop in European living standards
Measured in 'per capita GDP'. On an index of 100 for the USA in 1995, the standard of living in Japan was nearly 90 but only 70 in the EU. European living standards have stagnated around this level since 1980. Japan overtook Europe in the late 1970s starting from a level of prosperity half that of Europe's in 1960.
A slowdown in the rate of growth, relative to other developed
Between 1975-95 European growth rates have been 0.4% a year lower per year than in the USA. If the EU as a whole had grown as successfully, while maintaining productivity growth, total employment could have been 12 million higher by 1995.
A reduction in Europe's share of world exports and foreign investment
Excluding trade between members, the EU share in world merchandise exports has shrunk by 7% since the early 1970s. There has been an overall investment out of the EU since 1993. The EU share of world investment has declined by 15% since 1991, after rising in the previous ten years.
An increase in unemployment
After considering the long-term business pattern. Unemployment rates were
similar (between 5-7%) in western Europe and in the USA in 1980, and only 2% in
Japan. By 1996, unemployment had nearly doubled in Europe, but was under 6% in
the USA and less than 4% in Japan.
Why 'Europe isn't working'
EU industrial costs
Key goods and services for industry (eg energy, transport, telecommunications) are provided less efficiently and more expensive than in the USA. On average:
EU failing in Research & Development
The USA invests 2.7% of its economy whereas the EU on average spends only 2% of its (GDP). The EU lags in the key areas of IT and telecommunications.
EU tax burden
This stands at 42.5% on average in the EU compared with under 30% in the USA and Japan. (1996 figures, total tax income compared with economic production, GDP).
How long would an average production worker need to work to pay off the years tax, NI, etc?
The tax burden in most EU countries is still rising, although Europe is already the most highly taxed area in the world. Click here to find out more about the threat to Britain's taxes from the EU.
EU labour costs
Germany & Belgium have the highest level of labour costs in the world. Non-wage labour costs represent almost all of the difference in labour costs between the EU and the USA. They typically add 80% to wage costs in the EU but less than 40% in the USA.
EU lags in employment growth
Since the mid 1970s, employment growth has been slower in the EU (0.4% per year) than in the USA (1.8%). There has been a net loss of 3.5 million jobs in the private sector, whereas in the USA some 30 million new jobs have been created in the private sector.
The EU currently has an unemployment level more than double the USA's and three times Japan's. Youth unemployment is a particular problem standing at more than 20% against 12% in the USA (Figures for 1996).
Chickens coming home to roost?
Britain's economy is more in step with the USA's than the rest of the EU - indeed it is our economy's differences from the continent that make us more attractive. Currently we are capturing 10% of global foreign direct investment, and we are enjoying both a consumer boom and a savings boom.
The UK was recently voted
Yet some claim that the coming of the Single Currency will act as a catalyst in continental labour market reform - in areas where voluntary discussions have failed to produce reform.
See 'Benchmarking Europe's Competitiveness: from Analysis to Action', UNICE, 1998. The parties signing this off included Sir Colin Marshall, Chairman of the CBI.
Acknowledgements also to a speech by Bill Jamieson in London on 8 May 1998.
This page updated: 2 January 1999