Toward the Future EU Growth: Capital Markets Union and Structural Reforms

Antonin Rusek

doi:10.5430/ijfr.v8n1p1

Abstract

The progress of globalization confronts the EU with the new challenges. To answer these, the restoration of growth is the imperative. The competitiveness especially on the Mediterranean littoral and hopefully the real convergence must be restored. Renewal of the North to South capital flows is the sine qua non of this development. The key in this endeavor is the capital markets union, which will facilitate the increased activities of the venture capital – the main tool to create the new economy of innovation and creativity. But to be successful the capital markets union has to be complemented by reforms of labor markets, business creation environment and taxation. New approaches like special “economic innovation and growth” zones may be necessary. To fully implement the necessary structural reforms the cooperation of the private and public sectors on both the EU and national levels is necessary.

Highlights

The result of the British EU referendum in June 2016 brought to the forefront the issue of the future of the European Union
For political-economic organizations the most important internal challenges stem from economic-technological dynamics and demographics, which includes changing age cohorts, immigration dynamics and the impact of education in general
EMs still depend on the capital goods imports for their growth, which creates the opportunities for capital goods exporters – the EU countries north of Alps

Summary

Introduction

The result of the British EU referendum in June 2016 brought to the forefront the issue of the future of the European Union. Each organization (and EU is undoubtedly one) needs a modicum of structural and behavioral stability This includes social, political and economic institutions, legal system and, most of both external and internal environments. Such a stability makes the results of decisions of all agents predictable (albeit only in a statistical sense) – it provides for a dynamically functioning society in all its aspects. The development of nation-states was an answer to “internal” challenges, an attempt to create the type of a social and political organization able to internalize the consequences of a rapidly changing economy and the population rise via rapid urbanization. The commitment to political democracy and the welfare state (known as the “European economic model”) made the European political and economic community (EU from 1993) very attractive for its neighbors

Times of Change

The Gathering Clouds

The Crisis and Response

The Way Forward

Conclusion