On 15th January, Dr Barbara Kolm, Director of the Austrian Economics Center, delivered the Keynote Presentation Between Stagnation and Recovery at the British Embassy’s annual UK Trade and Investment Forum for 2015.
Dr Kolm’s presentation gave a brief but poignant review of Europe’s performance following the financial crisis, urging political leaders to put continuous structural reform back on the agenda.
“The EU economy is struggling to shake off its lethargy. Since the crisis struck, most Member States have been unable to generate or sustain strong economic momentum. While the recovery from such a deep crisis had been expected to be very subdued, the persistence of weak growth dynamics suggests that the EU’s current predicament is particular.”
However, countries such as the United Kingdom and Ireland are providing positive examples of economies that have decoupled from the euro area, focusing on trade ties and positive government reforms to drive growth and demand.
In Britain’s case, rising private investment and a focus on driving innovation in research and development have been shown as key contributing factors to falling levels of unemployment and a more positive outlook compared to its EU counterparts.
Dr Kolm also addressed the recent rise of anti-Europe sentiment, and the momentum being gained by political parties such as UKIP and France’s National Front. Looking to Britain, Dr Kolm stressed the potential problems of a disintegrating EU. “A formal withdrawal would cause serious and immediate problems for the British economy, and its trade and commerce with Europe.” says Dr Kolm. “British officials working in EU institutions and agencies would likely lose their jobs. London, as a capital of European finance, would recede in importance to Frankfurt and Paris. British exports to the European Union, worth £324 billion in 2011, would be disrupted unless London found a way to negotiate a free trade deal with the EU along the lines achieved by South Korea, Norway and Switzerland… and that would depend on the goodwill of Britain’s scorned former EU partners and the amicability of the breakup”.
The impact on Shale gas, tensions in the Ukraine and future of ISIS were also discussed.