WTO Chief Outlines Growth Plan For Europe To Exit Crisis

By Tengku Noor Shamsiah Tengku Abdullah SINGAPORE, Feb 29 (Bernama) -- Europe has to restore economic growth by finding its full place in the global economy if it wants to exit the current crisis, said World Trade Organisation (WTO) director-general Pascal Lamy. Lamy said this required two complementary reforms. "First, the European Union (EU) needs to become a real policy actor, with independent fiscal resources. "Second, its public policies should focus on improving the competitiveness of European firms in global markets," he said in his address at the Bruegel Institute in Brussels Wednesday. The text of his speech was released here. Lamy said the epicentre of the global financial crisis that started in 2008 was not Europe. "But Europe was the place where the crisis moved to in 2010," he said. He said since then, the key policy issue has been how the EU could find its way out of the problems. Lamy said a successful path of reform in Europe cannot be dissociated from the fast-pacing changes characterising the current phase of globalisation. "Changes in the regulatory environment, technology, and transportation costs have opened new markets, altering trade patterns and forcing countries to adjust. "The shift in comparative advantage that the world economy is facing today mirrors past experiences in the 19th and 20th centuries. "But what is unique about the current transformation is the fast pace at which change is taking place and the immense number of people involved," he said. He cited China and India which today accounted for 11 per cent of the world economy and according to some projections were likely to be more than double that in 20 years. "These swings in economic weight have profound geopolitical consequences and can lead to political backlash, trade tensions or worse. "Sometimes the international community has dealt with these pressures in a peaceful and successful way, others not. But the structural changes that were set in motion will hardly be reversed in the foreseeable future," he said. -- BERNAMA