Britain’s economic recovery depends on Europe’s economic recovery.
Whether it is European demand which represents our biggest market, or the European response to the financial crisis. And growth plans in this country are inextricably linked to similar plans in Europe.
Crisis measures now giving way to regulatory responses.
We are seeing a critical phase for business, and especially for financial services. The key here is to distinguish between the need for new proportionate regulation in financial markets on one hand and the wider regulatory agenda, where the somewhat more disciplined approach of the EU to better regulation needs to be maintained, but strengthened in the life of this Commission. Because business burdens, especially on job creation, will be critical to the rate of recovery in Europe.
Some, as we have seen, in the European Parliament will interpret the banking crisis as a clarion call for more business regulation in general. We need to push back against this intelligently. We have to lead that debate and bring it to a set of reasonable conclusions.
Of course, the City is sensitive about its regulatory burden and I understand the caution being expressed. We do not need regulatory grandstanding – we need regulatory coherence, joined up between jurisdictions. We do not need multiple, cumulative layers of regulation that amount to overkill.
What matters is keeping the burden right, especially for small firms. Business needs to engage firmly in Brussels alongside government to shape the regulatory debate.
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