Europe has had a persistent low growth problem over much of the past decade, exacerbated by the severe economic contraction triggered by the financial crisis, when EU GDP fell by 4.5% in 2009 alone. Since then, the European economy has been characterised by low growth rates, stubborn unemployment and stagnant productivity. According to European Commission forecasts, the EU’s annual GDP growth rate is expected to flat line around 1.6% in the period 2014-2020, compared to previous growth rates averaging 2.3% over 2001-2007. Total unemployment is falling gradually but remains at historically high levels across the EU, at an average of 9.5%, with particularly worrying pockets of youth and regional unemployment.
This report by Hook Tangaza, first gives an overview of Europe’s professional services markets, in terms of their internal structure and their wider contribution to the European economy. It then goes on to examine the role of regulation in determining the key characteristics of these markets and most importantly, in influencing their ability to contribute to European productivity. It then summarises past efforts to improve their functioning, notably through the Services Directive and recent activity at a European level to complete the Internal Market in professional services. Finally, before drawing some policy recommendations from this analysis, the paper looks at lessons that might be gleaned from other parts of the world and other sectors of the economy.
Link to full report: Regulation and productivity in Europe’s professional services markets