12 July 2005

Gorden Brown outlined UK agenda in Economic and Monetary Affairs

Speaking to the Economic and Monetary Affairs Committee to present the programme of the UK presidency, the British Chancellor of the Exchequer said full employment could be a realistic goal only if the EU faced up to the scale of reform needed.

The Chancellor spoke of the importance of maintaining high social standards, but said today's European social model was not a success, with 20 million unemployed in Europe, more than half of them out of work for more than a year. With more jobs likely to be 'outsourced' away from Europe, at least 22 million new jobs would be needed by 2010. Mr Brown said there needed to be a Europe-wide commitment to completing the single market, an active competition policy and reform to state aid rules, so that aid would focus on research and development, enterprise and regional imbalances, thereby tackling market failure. 'We must remove barriers to employment, encourage the skills of the future and make work pay,' said Mr Brown, who repeatedly stressed the importance of action by Member States to equip their citizens for the challenges of the future.

To reduce the regulatory burden of EU laws, Mr Brown said both proposed and current regulations should be subjected to a series of tests: a cost test, a competitiveness test and a risk based test. The last of these meant an approach where risks are analysed first, so that companies would only be asked to provide essential information.

Ms van den Burg asked about the reform of the stability pact, praising Mr Brown's own 'golden rule' on government borrowing. The Chancellor was positive about the pact's new emphasis on public investment, its greater attention to the economic cycle and to general government debt, though he said the test of the new pact was still to come. He added: 'Of course there will be a debate about the European Central Bank - whether it should have a symmetrical inflation target as we do in the UK.'

Economic and Financial Affairs - Presidency Priorities

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