Eurogroup President Dijsselbloem on growth and jobs in Europe
On 27 May Eurogroup President Jeroen Dijsselbloem i took part in the symposium “Governance in Europe: taking stock for moving forward” at Hertie School of Governance in Berlin. In his speech Dijsselbloem stressed that eurozone countries should not be afraid to put common policy challenges on the table and learn from each other. Bringing down the tax wedge on labour could be one of the reforms to be picked up jointly.
Eurogroup President J.Dijsselbloem speaking at the Hertie School of Governance in Berlin
© European Union, 2014
Dijsselbloem said that in the last few years all the attention had been focused on the day-to-day management of the economic crisis.
“We’re now starting to see the fruit of our efforts. Market confidence is recovering. Growth figures are becoming positive and the outlook is getting brighter in most of our countries. But while our macro figures are improving, many citizens are not yet feeling the benefit in their day-to-day lives. The elections have strengthened my belief that we have to maintain our focus on creating jobs and bolstering growth potential throughout Europe. That is what people, quite rightly, expect,” said the Eurogroup President.
Although the Eurozone countries differ in terms of their size, Dijsselbloem sees a common challenge when it comes to working for growth and jobs. He calls for a concerted effort within the Eurozone to push each other as far as possible, to make the economy of the euro countries truly competitive.
Throughout the eurozone, the structural issues countries have to deal with are different. But joint issues can be defined on which countries can work together - such as bringing down the tax wedge on labour.
The Eurogroup President argued that the high tax wedge on labour is an obstacle to boosting growth and creating jobs. The tax wedge is the difference between the net pay employees see in their bank accounts and the cost to their employer.
Most eurozone countries have a tax wedge which is higher than the OECD average. “The relatively high tax wedge on labour affects our competitiveness and distorts the functioning of our labour market. It makes Europe less attractive for businesses. If we want to create jobs, this requires our special attention,” said J.Dijsselbloem.