IMF Calls On EU To Deepen Single Market Integration To Boost Growth

Washington, (APP - UrduPoint / Pakistan Point News - 20th Apr, 2024) Deeper integration of the European Union's internal market could prove crucial for boosting lackluster economic growth and productivity levels in the 27-member trading bloc, a senior IMF official told AFP Friday.

"We estimated, actually, what you could do just by reform of that single market and integration -- and the numbers are startling high," International Monetary Fund European director Alfred Kammer said in an interview in Washington.

The IMF expects European growth to pick up slightly this year to 1.6 percent, increasing to 2.0 percent next year, according to a regional economic outlook published Friday.

But with European average per capita income levels -- in purchasing-power-parity terms -- still roughly one third lower than in the United States, Europe must do more to boost flagging productivity and growth levels, Kammer said.

The IMF estimates that cutting internal barriers within the EU's single market by 10 percent would lead to a seven percent rise in growth inside the EU.

"It requires leadership, and it requires to explain to the populations what the benefits are of that single market and of the European Union," Kammer said.

"Brussels is the scapegoat and is being blamed for many things," he added. "That narrative needs to change."

Beyond deepening regional integration, the IMF report suggested other ways to boost flagging productivity levels, including by increasing digitalization and enacting structural reforms.

"You can do a lot in Europe in order to catch up in this productivity gap," Kammer said.

"What is not good enough is when you're looking at current productivity growth rates in Europe," he added. "That will not help you converge."