ࡱ> ;=: $bjbj 8$$ IIIII]]]]4 ]CEEEEEE$LjiIiII~:IICCDq]]/0X^XXIx>,$ii_XX : the paralysis of contentment Baron Frankal Fear of the east has a new name: reform. Hungarys indomitable dentists merge loosely with Turks, Indians and Chinese to threaten our jobs. Common sense - and too many politicians - say that to protect ourselves we must keep them out ! The hard economic facts, however, are that job protection equals lower economic growth and higher unemployment. As Andr Sapir has powerfully shown, Europes economy is stuck in a post-war system of mass production, large firms, existing technology and long-term employment - unsustainable patterns in a world of global economic transformation at a speed and of a scope unparalleled in history. The Mediterranean (Greece, Italy) and Continental (Germany, France) models that best protect jobs have twice the unemployment of the Anglo-Saxons and Nordics, where, as its easier to fire, businesses hire more. These people see globalisation as opportunity not threat. Polls show that most Europeans associate the EU with globalisation: one reason for its growing unpopularity. Yet, to be against globalisation is like Canute commanding the waves to turn back: its here, its now and it rules, OK ? The economies of scale offered by the EUs Single Market represents our best hope of benefiting from globalisation and protecting our way of life. In 1970, the developed world accounted for under 10% of our imports; today it is 45% and rising. Europe simply cannot compete in the sectors that years ago employed us. We will prosper only if we attract foreign investment, throw ourselves wide open to innovation and technology, build skills and confidence and the key make employment flexible enough to allow entrepreneurs and better businesses to capitalise on markets that change with bewildering speed. Postponing reform makes problems grow and rewards less. A microcosm for all this is the battle over the Services Directive, which would unleash the Single Market on a sector making up about 70% of the EU economy. This would begin to allow the free flow of services across the EU, as already exists with goods. Consumers choose to buy Italian cars made under Italian rules: why cant the same apply for architects? As ever, short-term pain for long-term gain is a hard sell, as Jean-Claude Junker admits, saying that we all know what to do, we just dont know how to do it and get re-elected. Yet, leaders must act, encouraging foreign capital not restricting it, opening borders not barricading them, easing short-term contracts, pumping money into skills-training and matching people to jobs. Radical action attracts legitimate protests, but these must be met by explaining again and again how reform brings jobs. Alternatively, we could just shout at nasty foreigners a bit more and watch prosperity slide away; maybe our children, with less choice, will be a little braver. 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