Six things the EU thinks the UK should do about the economy
The European Commission has outlined six recommendations for the UK government to consider to encourage economic growth over the next 12 months.
In setting out its recommendations, the European Commission claimed the deficit was due to fall more slowly due to weaker growth.
It also highlighted several structural challenges, including a shortage of housing and its “persistenty negative net export position”.
The first recommendation is that the budgetary strategy for 2012-13 be fully implemented and be reinforced for the next financial year and beyond. It should be supported by measures “to ensure a timely correction of the excessive deficit in a sustainable manner”. The Commission also believes “growth-enhancing” spending be prioritised to avoid the risk of further weakening of medium-term growth negatively impacting public finances.
The second recommendation concerns high and volatile house prices and high household debt. It calls for a comprehensive housing reform programme to increase supply, alleviate affordability problems and reduce the need for state subsidy. The Commission has also called for further reforms to the mortgage and rental markets, financial regulation and property taxation.
The third recommendation aims to tackle youth unemployment, particularly among so-called NEETs – not in education, employment or training – by promoting apprenticeship schemes with a focus on advanced and higher level skills and involving more small- and medium-sized businesses. It also calls for measures to reduce the number of school leavers with “very poor basic skills”.
The fourth recommendation calls for measures to integrate people from jobless households into the labour market, and ensure welfare reforms do not cause greater child poverty.
The fifth recommendation argues for greater bank and non-bank financing for the private sector, and in particular small and medium enterprises.
The sixth recommendation calls on a long-term strategy for improving the capacity and quality of the UK’s infrastructure network, addressing pressures in the transport and energy networks, involving more public-private financing arrangements and promoting a more efficient and robust planning and decision-making process.