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Friday, March 11, 2005

Lack of investment in Eurozone

The News Room Finland site reports that the PrimeMinister of Finland will visit Malta for talks with the government next week. The discussions "will focus on EU affairs and, in particular, on the new financial framework, Growth and Stability Pact, Competitiveness Strategy and Enlargement". From the same site:

"Weak growth of investments in one the biggest problems Europe is facing," Prof Honkapohja said, presenting a report by the European Economic Advisory Group published Wednesday in Brussels. Prof Honkapohja chairs the group made up of eight prominent European economists.
The group recommended for example longer working hours as a means to improve the productivity of European companies.


Weak investment into old EU member countries is a long-time trend, which has of late been dubbed the China Syndrome in Finnish circles. Companies are taking their production not only to the Far East but also the new EU member countries of former east bloc countires, where labour costs are but a fraction of those of old EU member countries. Prof Honkapohja took as an example German cars that may in fact be manufactured to the very last stages outside of Germany with only the final touches being added in Germany.

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