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news analysis - the eurozone that isn't working


A European Commission report presented to the European Parliament on 21 January 2004 illustrates how misguided trade unions would be to continue to look to the Eurozone for jobs. The EU had promised to become "the most competitive, knowledge-based economy in the world by 2010", and the euro was supposed to be the key.

Now, it seems, it will fall far short of that. Comparing the EU with the US, the report states "there are significant problems which hold back the entire strategy and which hinder the return of strong growth".

Lagging behind
The report goes on to say that the main areas where the EU lags behind are jobs, productivity and investment. On the jobs front, it says the intermediate target will not be met by 2005. And only if there is an "economic upturn" comparable with the end of the 1990s, it says, will final targets be met.

Apart from the circular argument, one might ask, what economic upturn? If there was one, it certainly went unnoticed by workers, as job loss and the export of jobs gained momentum.

In terms of productivity in the EU, the report says the growth rate is actually declining. It is fluctuating between 0.5% and 1%, far behind the 2% achieved by the US. Public investment is also falling and is far below the US levels.

The report concludes: "The European Union's efforts to catch up with the United States are at a standstill."

This is a curious state of affairs in view of the fact that the US economy is at its lowest ebb for a decade, not least because of military expenditure. It only serves to show that prospects are even worse for the people of Europe than appears on paper.

And who is to blame for this sorry outcome? The Commission, for painting a false rosy picture as bait to lure new members in? Or the member states themselves?

True to form, the EC lashes out at the members. It's the old capitalist trick of blaming the workers. EU governments are being urged to ignore the aspirations of their electorates; instead, they "must use the spring summit in March to push through some meaningful reform measures". In other words, work harder for less.