Europe is growing again. And that’s good news for everybody

In the second quarter of this year the world’s largest integrated economy broke out of its negative trend and posted its first growth figures in 18 months. Two weeks ago the Organization for Economic Cooperation and Development (OECD) further raised its growth forecast for Europe’s three largest economies — Germany, the UK and France in spite of slower growth in emerging markets.

This recovery is not without risks and all Europe’s economic challenges are certainly not behind it, but several indicators point to a recovery that is widespread and sustainable. A European recovery would be a boon to the global economy and could help the Philippines pursue its own agenda of sustained and inclusive growth.

You may not have noticed, but this summer was the first for several years without a crisis related to the euro. Europe’s return to growth required painful structural economic reforms and severe belt-tightening by citizens in several member states. But tough decisions and the introduction of more flexible labor markets have delivered results, including in the more vulnerable member states.

Improved competitiveness boosted the exports of Portugal which registered higher-than-expected growth. Ireland broke out of recession with a welcome upswing in employment while Spain delivered a remarkable current account surplus, its first since records started being kept in 1971. In fact, Spain saw exports of goods and services rising to 33% of GDP more than ever since the introduction of the euro, demonstrating the impact of the very important reforms undertaken and the increased competitiveness of the country. This positive trend shines through the figures for the Eurozone as a whole with a trade surplus with the rest of the world for July that was up 30% from the same month last year.

Early July, I attended the inauguration of a factory in Batangas by a Danish company producing hearing instruments. This investment will create up to 2000 jobs in a few years’ time.  Recently I was informed that the German company Daimler will start a BPO operation in Cebu. With the recovery, European companies will further look for investments in fast growing economies like the Philippines. In August, Vice President Binay attended the inauguration of a European Union Festival organized by a Filipino department store, highlighting the quality and reliability of European consumer goods.

The Philippines’ private sector has also noted changes in Europe and intends not to miss new opportunities. In a few weeks, the Philippines’ Department of Trade and Industry will take a delegation of Philippine business people to visit several European countries including Germany, Sweden, Denmark and the UK. This will be an occasion for Philippine companies to present their products to possible European customers, to identify potential partners for new investment in the Philippines but also for some of them, to identify investment opportunities in Europe.

The European Union is aware that trade and investment are key drivers of economic growth and wishes to further expand its relation with emerging economies like the Philippines. More quality jobs are a top priority for both Europe and the Philippines. Europe’s recovery is good news for both.

*      *      *

(Guy Ledoux is the Ambassador of the European Union)