E.U. economy slowing down, says report

By Batuk Gathani

BRUSSELS, NOV. 24. Germany, considered Europe's biggest and the world's third largest economy after the U.S. and Japan, is now threatened by recession. A recent European Commission survey shows that America is getting richer and the European Union poorer with a fast eroding competitive edge.

The European Competetive Report published by the E.C. this week showed that growth and living standards in Europe were in sharp decline compared to those in the U.S. The gap in per capita growth on both sides of the Atlantic is estimated to be the largest in 25 years. The European Commissioner responsible for Enterprise Policy, Mr. Liikanen said, ``Europe is losing out in terms of growth and living standards'' and blamed this situation to low employment levels and productivity standards in the European Union compared to the U.S.

The E.U.'s four biggest economies - Germany, France, Italy and Britain - are not doing well. Hence, the report is a major setback to the E.U.'s ambition to become the world's most competitive economy by 2010. The report also revealed that E.U. expenditure on computers and communications equipment had declined to just 75 per cent of U.S. levels. This too contributed to lower European productivity levels.

European politics is increasingly being dominated by xenophobic issues related to immigration and employment. The governments are also seen dragging their feet on the key issue of economic liberalisation, particularly in the sectors of telecommunications and biotechnology. The European governments are also accused of following archaic policies on immigration reforms given that current demographic trends show that there will be more pensioners than tax payers in the E.U. countries within two or three decades. Major European countries could witness a substantial decline in skilled manpower resources due to falling birth rates.

Elections in the E.U. countries are increasingly seeing racist and xenophobic rhetoric. The elections held in Denmark earlier this week are an example where racial fears prompted average Danes to vote for the Right for the first time in 72 years. But Denmark, according to sociologists, is no exception and if the current trends are any indication, Germany and France could also be lurching towards Centre-Right politics with general elections due in both countries next year.

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Section  : International
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