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Instead of quarrelling over firewalls, Europeans should add just a fraction – say €10 billion – to the capital of the European Investment Bank. Under current conditions, the EIB may actually have to reduce lending. Instead, the EIB could use more capital to borrow and then invest to support structural reforms, showing Spaniards and Italians that their sacrifices will draw productive investments.
President José Manuel Barroso of the European Commission should also demand disbursement of the billions of euros of structural and cohesion funds that sit on its books while poorer parts of Europe go wanting; find the logjam and break it.
The single market – the very fibre of EU integration – could also come to the rescue. Although goods move freely in the EU, the service sector in many countries – including Germany – could open up more. Labour movement is also far more limited than in a true single market. Whether the cause is language, habits, matching jobs with workers, or cost of relocation, now is the moment to overcome the hurdles and advance the true unification of the EU. Show people who want to work that the EU wants them, too.
The combination of fiscal and structural reforms, EIB and EC investments, the opening of service markets, and easing the movement of workers will pay dividends. Mr Monti has travelled to Beijing to show China’s sovereign investment fund that Italy is becoming a good place to invest. That makes more sense than lobbying the Chinese to add to firewalls, especially if the EU itself invests and makes the single market more attractive.
Firewalls have their purpose. But this debate risks becoming a distraction. Europeans and their partners need to keep their eye on the strategic Schwerpunkt: helping Italy and Spain with growth and the politics of fiscal consolidation and structural reforms that will boost business, competition and jobs. The ECB has done its work. The other institutions of the EU need a burst of activism on investment and strengthening the single market to preserve and secure their union.
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