Pierrakakis in Economist: Single market must drive growth

A year since Mario Draghi, a erstwhile Italian premier curate and European Central Bank governor, presented his study connected European competitiveness, “the consciousness of urgency has lone deepened,” says Greek Finance Minister Kyriakos Pierrakakis successful an sentiment portion published successful Τhe Economist connected Wednesday.

“The propulsion to implicit the single marketplace must, however, spell manus successful manus with reigniting competitiveness. The European Commission is close to target persistent barriers that fragment the continent’s economies. But though regulatory convergence is necessary, it is acold from sufficient,” helium says, adding that “the value of completing the single marketplace is underlined by stark statistics: intra-EU barriers enactment arsenic a de facto tariff of 44% connected mean successful goods—three times higher than trade barriers betwixt American states—and an adjacent steeper 110% successful services, according to the IMF.”

“Lowering these barriers should beryllium a priority. Nevertheless, a caller burst of European maturation will necessitate pursuing two additional, captious shifts.”

The curate says EU needs to beryllium much strategic astir where it pools its resources—sector by sector. 

“Take telecommunications. It is simply a capital-intensive manufacture with declining margins, yet indispensable for integer competitiveness. In Europe today, telecoms operators look 27 antithetic regulatory regimes and person had to navigate 27 abstracted 5G-spectrum auctions. This patchwork drives up cost, slows deployment and makes it harder to execute scale,” helium said.

Contrast that to the United States which has a single regulator, the Federal Communications Commission, and a single spectrum-allocation process, helium continued. Meanwhile, China has gone adjacent further, allocating the spectrum administratively to operators, alternatively than auctioning it, successful designation that 5G’s value lies not successful auction revenues but successful the applications and services it enables.

“Europe’s presumption successful this broader geopolitical discourse has been paradoxical. In caller years, planetary contention implicit integer infrastructure has evolved into full-fledged strategic rivalry. Whereas the European Union has lacked a cohesive response, European companies person often been astatine the centre of the astir important developments—as starring providers of 5G infrastructure, standards and innovation. In different words, Europe held galore of the tools but lacked the communal argumentation to turn them into semipermanent concern strength,” helium says.

In Greece, the authorities tried to respond to this situation astatine the nationalist level. “We retained 25% of our 5G-auction proceeds to found a special money to put successful companies gathering 5G-enabled applications. This reflects a designation that successful the integer epoch infrastructure unsocial is not enough. Innovation connected top of that infrastructure is what drives growth,” helium writes. “Had Europe alternatively adopted a co-ordinated oregon adjacent singular regulatory approach, a unified auction model and a communal backing mechanics for strategic tech concern successful 5G applications, it mightiness person positioned itself much convincingly arsenic a planetary person successful 5G-enabled innovation. The accidental outgo of fragmentation is measured not lone successful missed efficiency, but besides successful mislaid competitiveness.”

The 2nd required change, the curate argued, is to align regularisation with the maturation priorities of the future, similar successful the lawsuit of procurement. “Here traditional operation projects tend to determination guardant overmuch much swiftly than integer oregon innovation-driven projects. That discrepancy is not simply procedural—it reflects the maturation priorities of an epoch successful which carnal infrastructure dominated strategic thinking,” helium says.

“Today the shelf-lives of integer projects are often measured successful months. In Europe, however, the timelines to committee and present them are measured successful years, the curate says. If it takes longer to procure a digital-identity system oregon a nationalist e-health level than it does to resurface a motorway, the organization model is intelligibly exerting a resistance connected ambition.”

“The question we should beryllium asking is not ‘How bash we marque procurement easier?’ but ‘What bash we want procurement to achieve?’ The reply indispensable beryllium maturation and innovation. That means rewriting rules to beryllium acceptable for agile development, public-private technology partnerships and accelerated deployment successful areas similar AI, cyber-security, vigor transition and precocious manufacturing,” helium says.