British Prime Minister David Cameron urged Europe yesterday to slash the regulations he said were holding back its businesses and slowing the economic recovery.
Speaking to an audience of the global business elite at the World Economic Forum in the Swiss mountain resort of Davos, Mr Cameron argued that deregulation could help Europe compete with rapidly growing emerging economies.
“We need boldness in Europe too, not least on deregulation,” Mr Cameron said. “Fail here and we’ll fall behind. Succeed, and we could add up to €180 billion to Europe’s economy.”
He said fellow European leaders such as French President Nicolas Sarkozy and German Chancellor Angela Merkel agreed with him that Europe needs to adopt a “light touch” on regulation to boost the continent’s growth.
“Nearly 20 years since Europe agreed to the free movement of people and services we’ve still got companies employing teams of lawyers just so they can trade across the nearest border,” he said.
“I’ve had conversations with many European leaders about this and we’ve agreed we just cannot afford to load more costs on to business,” he said.
“And I believe there are clear things we can and should do: Bring in a one-in, one-out rule for new European regulations,” he said, explaining that for every new EU rule adopted, another should be abolished.
“And give small businesses – engines of job creation – an exemption from big new regulations,” he added, arguing: “Taking them out of EU accounting rules alone would save them around two billion euros.”
Europe’s top priority, however, must be to kill off what he termed “the spectre of massive sovereign debts”.
Deficit and debt levels both in Europe and Britain are “clearly unsustainable” he said, insisting that “action cannot be put off”.
He vowed that Britain would stick to its tough austerity path to reduce its deficit that has seen some of the harshest spending cuts in decades, despite recent disappointing growth figures. The spending squeeze has resulted in Britain’s triple A credit rating being maintained and the interest rates on the country’s debt falling, Mr Cameron noted.
“All this has happened not in spite of our plan to cut the deficit, but because of it. That’s why we must stick to the course we have set out.”
“It’s going to be tough, but we must see it through.”
He said that if Britain stuck to this programme then the economy would bounce back and boost the eurozone in its wake.
“I’m very confident that Britain can be a great success story of this new decade,” he boasted, while repeating that Britain would not adopt the European single currency, even though it has a “real interest in the euro succeeding”.
“For a country the size of Britain it makes sense for us to have our own economic policy and our own monetary policy,” he said. “I want the euro to succeed but Britain is not going to join the euro.”