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European social model at risk – McCreevy

EUROPE – The European social model is at risk amid low growth and changing demographics, says Charlie McCreevy, the European Commission’s internal markets chief.

Speaking at a conference in Italy, he cited more than 10% unemployment in many member states.

“This is creating new divisions in our societies between those who have a job and those who do not. And economic growth in Europe over the last few years has been below its potential.

“Added to this, we have the twin problems of low population growth and ageing. In other words, our working age population is shrinking while the number of our citizens who are past retirement age is growing.

He said the problems were not just a matter of “academic interest”.

“Growth is the key to our future prosperity. Without it, we will not be able to improve or even maintain our living standards. And we will not be able to sustain our social model, our pensions and our healthcare systems – particularly as our population grows older.”

He was speaking at ‘the Agenda for Europe – Economy and Competitiveness’ event in Cernobbio.

He said the only way to generate sufficient growth in today’s global economy was by boosting international competitiveness.

He said member states need to identify and remove the rigidities within their markets which are hampering growth.

“In many cases,” he told delegates, “these rigidities will be in the labour market and/or their social security systems.”

And – in a reference to the current textile dispute - he said that those who call for a retreat into protectionism were just “whistling in the wind”.

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