BRUSSELS (Reuters) - After dealing with the sovereign debt crisis, the euro zone must now focus on how to win more business for its manufacturing and services industries and make sure its energy supply is secure, the EU’s top economic official said on Saturday.
The euro zone economy is set to start growing again this year after four years of crisis which kept policy-makers busy with unprecedented institutional reform of the single currency area.
Over the last four years, the euro zone has created a bailout fund - the biggest lender of last resort in the world. It has sharpened rules to control budgets, introduced debt breaks into national laws and set up a banking union with one supervisor, one set of rules to shut down a bank and money to pay for it.
But now that the crisis is over, priorities have to change, EU Economic and Monetary Affairs Commissioner Olli Rehn told Reuters in an interview.
“In economic jargon - a move from macro to micro,” said Rehn, who starts a leave of absence from the Commission on Monday to run in the European Parliament elections on May 25.
“We have done the macro for the moment - we have stabilized the European economy. Now it is time to focus on strengthening economic competitiveness and entrepreneurship for the sake of job creation,” he said.
Reducing the unemployment rate is generally regarded as a big challenge for the EU, but the rate has at least stopped rising. Unemployment in the euro zone went down to 11.9 percent from 12 percent in October 2013 and has been stable at 11.9 ever since.
Rehn stressed the need for cutting red tape for businesses, better education and completing work to make all 28 countries of the European Union one big market in which all goods and services can be freely traded and its 500 million people can travel or work.
“Instead of institutional wrangling, we have to focus on concrete, practical efforts to strengthen the ongoing economic recovery and job creation in Europe,” Rehn said.
The urgency of this task is underlined by the rise of nationalistic parties across Europe, which gain their support from people tired of the economic crisis, of the record high unemployment and of the need to bail out countries that got cut off from markets because of excessive spending.
GROWTH AND JOS TAKE PRIORITY OVER MORE EURO ZONE INTEGRATION
The EU has more ambitious projects up its sleeve like a euro zone finance minister, a euro zone treasury, euro zone budget or even euro zone bonds, but none of them stands a chance of ever being realised without popular support.
Such projects will be on the agenda of EU institutions after this year, but practical issues immediately helping growth and job creation were more important for now.
“It will be an important work stream of the next Parliament and next Commission,” Rehn said.
“But we have to identify what the most important issues are for the moment. It is the economic reforms that matter more than institutional wrangling,” he said, noting that the internal workings of the euro zone could be improved.
While the EU should stay out of the small issues best solved locally, it could help its companies with big issues, Rehn said.
“By big things I mean safeguarding peace and security in Europe which is not an outdated mission as we have seen unfortunately in eastern Europe in recent months,” he said.
“In the medium to long-run, challenges in the case of Europe relate mostly to the economic recovery and energy security which is very topical for many reasons,” he said.
He noted certain parts of Europe were excessively dependent on Russian gas, which was not only important to heat homes, but was also key for industry that is fighting to be competitive in the global economy.
It was therefore important for Europe to increase its energy security and build alternative sources of renewable energy.
“That is this big challenge and that is related to the move from macro to micro,” Rehn said.
“The committees of international trade, industry and energy and environment in the next parliament may be more exciting and important than the economic committee,” Rehn said.
Reporting By Jan Strupczewski; Editing by Stephen Powell