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Business demands greater share of public services
05 February 2012
Report says that gains made by the Single Market Act – will not claw back all the losses caused by the crisis – National industry ministers and European Union policy-makers meeting in Copenhagen this week will hear businesses demand that more public services should be outsourced to the private sector to promote growth.
A report published yesterday indicates that gains made by the Single Market Act – the European Commission's blueprint for opening up the single market – will not claw back all the losses caused by the financial crisis.
The study, carried out by Copenhagen Economics and commissioned by the Confederation of Danish Industry, a member of Business Europe, predicts a loss of potential gross domestic product (GDP) of 20% in the EU between 2008 and 2017, representing €240 billion per year. Implementing all the priorities listed in the Single Market Act would increase the overall GDP of the EU an estimated 5%.
With no room left for further loosening of fiscal policy in the EU's member states, the report's authors suggest that, to help make up the shortfall, the EU needs to make it easier for the private sector to deliver services normally run by public bodies. This, they add, could lead to a 10%-20% increase in cost savings.
Breaking ‘taboos'
Sinne Backs Conan, a European affairs director with the Confederation of Danish Industry, said that a major increase in the use of the private sector was a "taboo" that had to be broken, in the same way as the financial crisis was forcing the EU to look at pension reform and tax harmonisation. "The private sector can unlock growth. We have to be more radical," she said.
