Lasting growth achieved through greater stability - BusinessEurope

The council of presidents of BusinessEurope, which groups together 40 business organisations in 34 European countries, including the Malta Chamber of Commerce, have agreed on a declaration on economic recovery, growth strategy, global competitiveness, fiscal discipline and euro governance.

"Discipline and growth must also go hand in hand. The escalating sovereign debt crisis has heightened uncertainty and is having far-reaching consequences for companies' investment decisions across Europe. To restore trust and avoid leaving an unbearable burden for future generations, many European governments have to prescribe a hard but necessary medicine," the presidents said.

According to BusinessEurope, recovery is still consolidating despite growing uncertainty. It predicts growth in the EU to average 1.1 per cent this year and 1.6 per cent in 2011.

BusinessEurope strongly believes that successful fiscal consolidations will rest on expenditure cuts and a reprioritisation of government policies. The only way to alleviate the short-term costs of austerity measures will be to embed them in an ambitious growth agenda for Europe, stimulating the adaptability of companies, supporting the employability of people and ensuring the long-term viability of our social systems.

Global competitiveness is key to get Europe out of the crisis. BusinessEurope's "Go for Growth" plea is quite clear: reform markets and institutions to unleash companies' potential, and let them drive Europe out of its current economic difficulties.

Key ingredients for success include better framework conditions for innovation and entrepreneurship, greater access to global markets and finance for companies, implementation of EU flexicurity principles, and an ambitious EU industrial policy.

"At a time when companies are gearing up for the recovery, international competitiveness must be the overarching priority. This must apply to all policy areas including the EU's climate mitigation strategy and financial market reform agenda, where a unilateral approach must be avoided," the declaration said.

"The euro is a fundamental pillar of European integration and has brought great benefits to companies and citizens across our continent. BusinessEurope believes that the euro requires solidarity and cohesion between countries sharing it as a currency."

For countries sharing the single currency, BusinessEurope recommends earlier debates in the eurogroup on national budget orientations, a broader surveillance of economic policies and forceful actions to prevent imbalances from developing in the first place; a system of gradual penalties and sanctions to deter repeated indiscipline; and a transposition of debt and deficit rules into national law and reforms of regional and local fiscal institutions.

In the medium term, BusinessEurope also believes that the eurozone should be equipped with a more permanent crisis resolution system. This should notably include a mechanism that allows for public debt restructuring and orderly default in last-resort situations. These decisions should ensure that financial stability be secured while preserving the full independence of the European Central Bank.

Helga Ellul, president of the Malta Chamber of Commerce, Industry and Enterprise said: "Europe is at a crossroads and has a simple choice to confront: reform or decline. No matter how difficult, reforms have to be taken. We believe that businesses are not the problem, they are the solution."