The OECD 2007 economic review of the European Union

The European Commission welcomed the publication by the OECDof its first Economic review of the European Union, which covers a wide range of Community policies and issues (including internal market, financial services, energy, competition, trade and agriculture, cohesion policy and labour mobility) and puts forward a number of policy recommendations.

The review highlights the impressive performance of the European Community and its 'four freedoms' in bringing prosperity to the EU and its citizens, since the economic reforms have already started paying off, especially in the Member States that started early. Furthermore, combined with a supportive international environment, this allowed the EU economy to enjoy a cyclical rebound in 2006 with growth at 3%. Despite the recent turmoil of financial markets the fundamentals of the EU economy remain solid.

While the positive outlook can be maintained for the coming years, there is no room for complacency, as also recommended by the OECD in its report. Further structural reforms are needed to raise potential growth, and cope with technological change, globalisation, population ageing and climate change.

The document notes as well that a vibrant internal market is central to Europe’s long term prosperity. The single market has delivered major benefits and needs to be further enhanced, especially in the services sector. The forthcoming Single Market Review, to be adopted by the Commission in November 2007, will set out a strategic action plan to tackle remaining barriers within the internal market, and deliver additional tangible results to citizens.

Finally, it praises the reform of the Common Agricultural Policy adopted in 2003, in particular the introduction of decoupling of support from production activities, and calls for continuing reforms in this direction, whereas it states that there is a need for greater competition in network industries, particularly energy.