European businesses see EU falling short on reforms

[BRUSSELS] European Union members have made satisfactory progress over the past year on only a fifth of reforms required to boost growth and competitiveness, according to a survey of the bloc's business federations.

BusinessEurope, which represents federations in 33 countries, asked its EU members to rate efforts by their governments to implement country-specific reforms. They assessed implementation as excellent or satisfactory in only 22 per cent of cases.

"We fell further behind our competitors," BusinessEurope's director general Markus Beyrer told a news conference on Monday, highlighting deficiencies relative to the United States, Japan, China and India in growth, job creation and foreign direct investment.

Even with cheaper oil, energy costs were 2 1/2 times higher than in the United States while starting a business costs three times as much and takes almost twice as long, the group said.

The digital economy is seen as a key area of expansion by the current European Commission but EU countries lagged competitors in terms of broadband connections and research spending, BusinessEurope said. The EU was the only major economy in which investment in broadband had declined since 2008.

Patent applications were fewer than in Korea, Japan and the United States, where patents were a tenth of the EU price even though there is agreement across the bloc that costs should be reduced, Mr Beyrer said.

Business federations in Britain, Estonia, Latvia and the Netherlands were broadly satisfied with their countries' reform efforts but the picture was mixed in eurozone periphery states.

Greece, Ireland, Portugal and Spain drew fewer dissatisfied assessments than a year ago but also fewer satisfied ones.

BusinessEurope also said that in Finland and Sweden, both traditionally seen as economically strong and competitive, businesses considered that reform impetus had slowed.

"What might be called the 'fat cat' syndrome is a dangerous thing," Mr Beyrer said.

The business federation acknowledged that bond buying by the European Central Bank, low oil prices and a weak euro were favourable, but were not reasons for inaction.

"The macro picture is one of opportunity," Mr Beyrer said. "It is a window of opportunity that needs to be taken to do things."

REUTERS