Schröder Reveals Plan to Boost EU Economy

German Chancellor Gerhard Schröder will put forward a seven-point plan at next week's EU summit to boost the European internal market, he wrote Tuesday in the Wall Street Journal Europe, France's La Tribune and Germany's Handelsblatt newspapers.

Schröder said in a signed article that since the so-called Lisbon Strategy launched in 2000, the EU had already chalked up some major successes, such as opening up the telecoms market to competition, but more needed to be done to make the European economy the most competitive in the world by 2010.

"At stake is the preservation of the European social model: The broad participation of society in the economy, the wide range of social protections, a fair distribution of goods, and a high degree of environmental safeguards," Schröder wrote. "From the German perspective, there can only be one answer to the challenge: Europe must set clear priorities for more sustainable growth and employment."

Schröder's strong support for the Lisbon Strategy was in sharp contrast to the outgoing head of the European Commission, Romano Prodi, who was quoted in Britain's Financial Times on Monday as saying that Europe's efforts to catch up to and then outpace the US economy have been "a big failure."

Energy and electricity freedom

The key thrust of Schröder's "Seven Chances for the Internal Market" is that by mid-2007 all consumers in the enlarged EU -- which now represents a market of 450 million people -- must be able to freely choose their electricity and energy providers, as has been the case in Germany since 1998. "This will intensify cross-border competition, benefit consumers and industries by providing cheaper energy and stimulate economic activity across the board," Schröder explained.

The German leader talked about the need to ensure the stability and growth of European financial markets and called for consumer banking in Europe to be made more efficient, for instance by making money transfers across EU borders faster and cheaper.

Service industry must be utilized

Schröder pointed out that 70 percent of jobs in the EU are in the service sector but said the sector "has enormous, and untapped, potential for growth." He backed the European Commission's suggestion for a directive on the service industries as the "logical, right and obvious step towards achieving this goal."

In order to consolidate the EU's defense industry, Schröder suggested "standardizing munitions to ease intra-EU arms sales."

European harmony

His sixth point backed the European Commission's plan to draw up a European contract law as companies who operate across the continent "have to deal with 25 different legal systems." Finally, Schröder suggested harmonizing the way each country assesses corporate taxes.

Schröder was expected to discuss his proposals with French President Jacques Chirac during a Franco-German mini-summit in Berlin on Tuesday.