The following facts were not provided
by a Euro-sceptic MP. Much of this article is based on a report
from UNICE, a European employers' federation, which - if anything
- is very pro-EU.
Britain joined what was then the EEC in
1973. Since the 1970s there has been:
A relative drop in European living standards
Measured in 'per capita GDP'. On an index
of 100 for the USA in 1995, the standard of living in Japan was
nearly 90 but only 70 in the EU. European living standards have
stagnated around this level since 1980. Japan overtook Europe
in the late 1970s starting from a level of prosperity half that
of Europe's in 1960.
A slowdown in the rate of growth, relative
to other developed economies
Between 1975-95 European growth rates have
been 0.4% a year lower per year than in the USA. If the EU as
a whole had grown as successfully, while maintaining productivity
growth, total employment could have been 12 million higher by
1995.
A reduction in Europe's share of world exports
and foreign investment (FDI)
Excluding trade between members, the EU
share in world merchandise exports has shrunk by 7% since the
early 1970s. There has been an overall investment out of the EU
since 1993. The EU share of world investment has declined by 15%
since 1991, after rising in the previous ten years.
An increase in unemployment
After considering the long-term business
pattern. Unemployment rates were similar (between 5-7%) in western
Europe and in the USA in 1980, and only 2% in Japan. By 1996,
unemployment had nearly doubled in Europe, but was under 6% in
the USA and less than 4% in Japan.
Why 'Europe isn't working'
EU industrial costs
Key goods and services for industry (eg
energy, transport, telecommunications) are provided less efficiently
and more expensive than in the USA. On average:
Energy prices are 47% higher
Freight transport costs 40% more
Long distance phone calls cost nearly 200% more
An Internet connection costs over 100% more
EU failing in Research & Development
The USA invests 2.7% of its economy whereas
the EU on average spends only 2% of its (GDP). The EU lags in
the key areas of IT and telecommunications.
EU tax burden
This stands at 42.5% on average in the EU
compared with under 30% in the USA and Japan. (1996 figures, total
tax income compared with economic production, GDP).
How long would an average production worker
need to work to pay off the years tax, NI, etc?
In Belgium, to the end of August
In Britain, till mid-June
In the USA, until early May.
The tax burden in most EU countries is
still rising, although Europe is already the most highly taxed
area in the world. Click here to find out more about the threat
to Britain's taxes from the EU.
EU labour costs
Germany & Belgium have the highest level
of labour costs in the world. Non-wage labour costs represent
almost all of the difference in labour costs between the EU and
the USA. They typically add 80% to wage costs in the EU but less
than 40% in the USA.
EU lags in employment growth
Since the mid 1970s, employment growth has
been slower in the EU (0.4% per year) than in the USA (1.8%).
There has been a net loss of 3.5 million jobs in the private sector,
whereas in the USA some 30 million new jobs have been created
in the private sector.
The EU currently has an unemployment level
more than double the USA's and three times Japan's. Youth unemployment
is a particular problem standing at more than 20% against 12%
in the USA (Figures for 1996).
Chickens coming home to roost?
Britain's economy is more in step with the
USA's than the rest of the EU - indeed it is our economy's differences
from the continent that make us more attractive. Currently we
are capturing 10% of global foreign direct investment, and we
are enjoying both a consumer boom and a savings boom.
The UK was recently voted
7th best in the world for competitiveness
2nd best in terms of the overall business environment
Yet some claim that the coming of the Single
Currency will act as a catalyst in continental labour market reform
- in areas where voluntary discussions have failed to produce
reform.
Footnotes
See 'Benchmarking Europe's Competitiveness: from Analysis to Action',
UNICE, 1998. The parties signing this off included Sir Colin Marshall,
Chairman of the CBI.
Acknowledgements also to a speech by Bill
Jamieson in London on 8 May 1998.
