EUROPEAN ECONOMY' Appears Four Times a Year, in March, July, September and November
Total Page：16
File Type：pdf, Size：1020Kb
'EUROPEAN ECONOMY' appears four times a year, in March, July, September and November. The November issue contains the Com mission's proposal for the annual report on the economic situation in the Community. This report, which the Council adopts in the fourth quarter of each year, establishes the economic policy guidelines to be followed by the Member States in the year that follows. The November issue also contains the Commissian's annual economic review, the back ground analysis to the proposed annual report. In March and September, 'European Economy' gives a review of the current economic situation in the Community, together with reports and studies on problems of current interest for economic policy. The July issue presents a report on the Community's borrowing and lending activities in the preceding year. Two supplements accompany the main periodical: Series A-'Economic trends' appears monthly except in August and describes with the aid of tables and graphs the most recent trends of industrial production, consumer prices, unemployment, the balance of trade, exchange rates, and other indicators. This supplement also presents the Commission staff's macroeconomic forecasts and Commission communications to the Council on economic policy. Series B-'Business survey results' gives the main results (orders, stocks, production outlook, etc.) of opinion surveys of industrial chief executives in the Community, and other business cycle indicators. It also appears monthly, with the exception of August. Subscription terms are shown on the back and the addresses of the sales offices are shown on page 3 of the cover. Unless otherwise indicated the texts are published on the responsibility of the Directorate-General for Economic and Financial Affairs of the Commission of the European Communities, rue de la Loi 200, 1049 Brussels, to which enquiries other than those related to sales and subscrip tions should be addressed. Commission of the European Communities EUROPEAN ECONOMY September 1985 Number 25 The manuscript was completed on 16 October 1985. Reproduction is subject to acknowledgement of the source, except in the case of commercial data-base networks, where the authorization of the Commission is required. Printed in Belgi11m. /985 Catalogue number: CB-AR-85-026-EN-C SUMMARY General synopsis Chapter 1: Competitiveness of European industry: situation to date 9 Box: The main determinants of employment: a tenta tive quantification 32 Chapter 2: The determinants of supply m industry in the Community 37 Box: Problems in using the capital stock for the pur poses of economic analysis 67 Chapter 3: The development of market services in the Euro- pean Community, the United States and Japan 69 Box: Changes in employment and hours worked in certain market service activities 93 Box: The leasing of investment goods 94 Chapter 4: Technical progress, structural change and em- ployment 97 Statistical Annex 113 3 Abbreviations and symbols used Countries B Belgium DK Denmark D Federal Republic of Germany GR Greece F France IRL Ireland I Italy L Luxembourg NL The Netherlands UK United Kingdom EUR 10 Total of the Member States of the European Community EUR9 Community without Greece Currencies BFR Belgian franc DKR Danish krone DM German mark DR Greek drachma FF French franc IRL Irish pound (punt) LIT Italian lira LFR Luxembourg franc HFL Dutch guilder UKL Pound sterling ECU European currency unit USD US dollar SFR Swiss franc YEN Yen CAD Canadian dollar Os Austrian schilling Other abbreviations ACP African, Caribbean and Pacific countries ECSC European Coal and Steel Community EDF European Development Fund EIB European Investment Bank EMCF European Monetary Cooperation Fund EMS European Monetary System ERDF European Regional Development Fund Euratom European Atomic Energy Community Eurostat Statistical Office of the European Communities GDP(GNP) Gross domestic (national) product GFCF Gross fixed capital formation mio Million NCI New Community Instrument OCTs Overseas Countries and Territories OECD Organization for Economic Cooperation and Development OPEC Organization of Petroleum Exporting Countries SMEs Small and medium-sized enterprises SOEC Statistical Office of the European Communities toe Tonnes of oil equivalent 4 General synopsis General synopsis In the Community, the unsatisfactory allocation of the fac tors of production has become more marked. The diffusion With 11,2 % of the labour force unemployed in the Com of productivity and other gains through the production munity in 1985, the economic crisis has taken a heavy toll. system has been hampered and the rate of job creation Unemployment in the Community is much higher than in sharply curtailed. In the United States and especially in the United States (7,3 %) and especially Japan (2,5 %), and Japan, the 'exposed sectors' and the 'sheltered sectors' have there is no sign of it falling in the near future. Within the played quite different roles, thereby ensuring a more satisfac Community, conditions in the different sectors of activity are tory overall economic performance; the former have concen a source of even greater despondency. Since the beginning of trated on safeguarding their cost effectiveness and have the 1970s, most of the larger sectors of activity (agriculture, launched a major investment drive, while the latter have industry, construction) have significantly reduced their recorded moderate productivity gains with an accompanying workforces. At the same time, services, especially those rise in employment. linked to general government, have, it is true, created milli ons of extra jobs, but still not enough to provide work for all those seeking work. Along with Japan, the United States, Chapter I : Competitiveness of European m where the business cycle has fluctuated widely and a greater dustry: situation to date number of people have moved in and out of the labour force, has throughout demonstrated its ability to generate Since 1973, the rate of growth of world demand for industrial employment for the bulk of the population. Between 1972 products has slowed down, intensifying international compe and 1982, for example, an extra 19 million people found tition as each manufacturer has endeavoured to hold on to jobs in the United States and an extra 6 million in Japan, or increase market shares. whereas total employment in the Community rose by only 60 OOO. Demand for some manufactured products with a high new technology content has, however, been extremely firm, ex This curtailing of the job-creation process, and its adverse panding by 6-7 % a year in volume terms, or two to three impact on the development of unemployment, provides the times faster than demand for other products. Those most tangible evidence of the seriousness of the adjustmen·t countries well placed to meet this demand, particularly be crisis which is now facing the Community and which, when cause of their competitive edge, were certain to enjoy a more account is taken of developments in the main industrial satisfactory growth performance. areas of the world, is more European than global in nature. An analysis of the performances of recent years shows clearly On the basis of a comparison of the economic performances that Community industry has been unable to take advantage in the Community, the United States and Japan, analysed of the opportunities offered. In the case of the strong by sector, the following chapters describe the main structural demand products, it has managed neither to satisfy fully the developments over the last 15 years and attempt to assess needs of European consumers, nor to expand its outlets what the main explanatory factors have been. They also worldwide. As a result, in terms of total internal demand in look at the situation in industry, the new economic role the Community, the rate of penetration by high-technology played by market services, and the impact of technological products from outside the Community rose from 7 % to progress on structural change. The main conclusions present 17 % between 1972 and 1982, whilst over the same period a consistent picture thus: the corresponding figures for the United States and Japan (i) The Community has not performed as well as its trading were 10 % and 5 % respectively. At the same time, in spite partners in the growth sectors. i.e. those most closely of an increased export drive, the Community's share of the linked to new technologies, and its competitiveness in world market contracted from 28 % in 1972 to 25,7 % in those sectors has deteriorated both on world markets 1982, while the shares accounted for by US and Japanese and on the internal market. producers expanded. This resulted in a slow but steady fall in the cover ratio of Community imports by Community (ii) In contrast, in the Community, the weak-demand sec exports. Moreover although the import cover rate for Com tors. or those less subject to the pressures of international munity industry remains high, the high-technology sectors competition have maintained, if not improved their pos are contributing less and less to trade surpluses. itions. This shift towards products less sensitive to a recovery in economic activity has contributed, to an This analysis of trade flows paints a fairly accurate picture important extent, to the worsening of the employment of conditions in European industry. In the high-technology situation. sectors (electrical equipment and electronics, information s General synopsis technology and automated office machinery, precision and munity are slight, whichever Member State we look at; measuring equipment, and chemicals and pharmaceuticals), the dispersion is, in fact, half that observed in the United European products are not sufficiently competitive, and States or Japan. this has led to a growing import dependence on products manufactured in the United States, Japan and certain (ii) Over time, this wage dispersion has tended to narrow, countries of South-East Asia and to less emphasis being particularly in countries providing a guaranteed mini placed on high-technology exports. On the other hand, Com mum wage or applying inflation indexing to wages.