Europe Must Look Inward to Drive Growth, ECB’s Lagarde Says

Its growth model is ‘geared towards a world that is gradually disappearing’

By Paul Hannon of The WSJ. Excerpts:

"Instead of relying on fading external demand, Lagarde said the European Union must quickly lower its internal barriers, which prevent businesses from offering goods and services in other countries without costly efforts to comply with local regulations.

“ECB analysis finds that internal barriers in services and goods markets are equivalent to tariffs of around 100% and 65%, respectively,” Lagarde said." 

"“Reforms such as harmonizing VAT rules or establishing a common consolidated corporate tax base remain stuck because of national vetoes, leaving firms to navigate a maze of fragmented tax regimes,” she said.

Lagarde also advocated for the creation of what are known as “28th regimes”, or legal frameworks that apply across the EU which businesses could choose over national laws."