Points of German plan to raise eurozone competitiveness
German officials have drafted a "competitiveness pact" to foster economic convergence within the 17-member eurozone, according to a document obtained by AFP.
The proposals are to be discussed by European Union leaders on Friday but will probably only be adopted at an EU summit at the end of March by eurozone members and any others that wish to sign on as well.
The pact is to include "concrete commitments that are more ambitious and binding than those already adopted by the 27 member countries of the European Union," the text says.
Here are the main points:
- INTRODUCTION OF COMPETITIVE INDICATORS
Berlin wants to see constant tracking of competitive indicators as well as of information on public finances with pre-established values.
The text makes several proposals, including adopting the European Central Bank's harmonised competitive indicator, tracking export market share, public sector wage levels or minimum investments in education and research expressed as a percentage of gross domestic product (GDP).
- CONCRETE MEASURES OF ECONOMIC CONVERGENCE
These would be part of a "six point programme for increased competitiveness" and would have to be implemented within 12 months.
They would include the elimination of inflation-indexed wages, mutual recognition of diplomas and training programmes to encourage labour mobility and the creation of a common base for professional taxes.
Pension systems would have to be modified to account for demographic trends, and retirement ages would have to be pushed back where necessary.
The programme would also include the adoption of a crisis resolution mechanism for the banking sector.
- DEBT LIMITS
Berlin wants partners to adopt constitutional restrictions like the German "debt brake" that limits its structural budget deficit to 0.35 percent of GDP by 2016.
© 2011 AFP