Europe's decades-old economic model, which relied heavily on an expanding workforce, is coming to an end, Eurogroup President Kyriakos Pierrakakis said on Wednesday.
At a conference organized by the European Investment Bank, Kyriakos Pierrakakis said that Europe's economy is facing serious demographic problems and that by 2040 its workforce, currently around 200 million people, could be reduced by almost two million people a year, reports Reuters, quoted by Agerpres.
The forum led by Kyriakos Pierrakakis, Eurogroup, is a body founded almost three decades ago that provides economic advice to EU countries.
“Growth can no longer be based on expanding labor supply. It must come from higher productivity. And higher productivity comes from innovation, investment and an efficient allocation of capital,” Pierrakakis said.
“The growth model that has sustained European prosperity for decades is reaching its limits,” estimated the president of the Eurogroup.
“It's the only lever”
Pierrakakis stressed that the European Union's strategic task is to mobilize capital more efficiently to finance innovation and expansion. “This is the only lever that can increase productivity, increase revenue, strengthen strategic autonomy and build resilience,” Pierrakakis said.
The 27-nation EU bloc wants to integrate its various capital markets into a single market where capital can flow more freely so that Europeans' savings in bank deposits, estimated at around 10-11 trillion euros ($12.8 trillion), can be used more productively to finance the growth of innovative companies.
The integration of capital markets has been slow due to national interests and political differences, but the geopolitical changes of the past 12 months have created a new sense of urgency.
