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10/24/13

EU - Focus on growth on eve of EU summit in Bruxelles and US NSA spying on Europeans

The summer is past and European summits return. Europe's leaders gather in Brussels on Thursday with the markets becalmed and some economic statistics to celebrate. 

Even the threat - a few weeks back - of the Italian government falling scarcely ruffled the markets. The promise by the president of the European Central Bank, Mario Draghi, a year ago, to do whatever it takes to defend the euro continues to act as a shield against the bond market vigilantes. No one, it seems, is prepared to bet against the ECB.

It is true that almost on a daily basis there are reassuring signs of progress.

The Spanish economy has just edged out of recession after two years. Since 2008 its exports have grown by an impressive 14.6%. Unemployment at above 26% may have peaked. Italy is running a trade surplus and Greece this year will register a primary budget surplus excluding debt repayments. Ireland is set to exit its bailout programme in mid-December.

And yet despite all the austerity and spending cuts the level of debt, amongst the countries that use the eurozone, is still rising.

French unemployment, which was down in August, is set to rise again. Italy is struggling to bring down its labour costs without which it cannot be competitive. The Greeks are locked in argument with their lenders over a budget gap. It may need further funding. It was revealed this week that Greeks are, on average, 40% poorer than in 2008.

Even the most Panglossian of Europe's leaders recognises that the recovery is fragile and solid growth is needed so in Brussels the leaders will concentrate on supporting and expanding the digital economy and building a single digital market.

But new allegations of US eavesdropping on Germany's Chancellor Angela Merkel may also be discussed.

France's President Francois Hollande is pressing for the issue to be put on the summit agenda, following reports that millions of French calls have been monitored.

The veteran French EU Commissioner Michel Barnier told the BBC that "enough is enough", and confidence in the US had been shaken.

Mr Barnier, the commissioner for internal market and services, said Europe must not be naive but develop its own strategic digital tools, such as a "European data cloud" independent of American oversight.

The digital economy is on the official summit agenda for Thursday evening ( tonight) . 

Read more: BBC News - Focus on growth on eve of EU summit

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