Proposals for the euro zone to function better economically

We examine purely economic and not security or immigration questions . We believe that four things must happen to improve the structural situation of the euro-zone economy: Restore capital mobility between the euro-zone countries so that all efficient investments can be financed , wherever they are ; and so that risks are shared thanks to portfolio diversification . T his will require reassuring lenders about the solvency of governments and banks; Establish a “labour market union”, i.e. the harmonisation of labour market functioning across the euro-zone countries. The current heterogeneity in labour market functioning distorts competitiveness, the correction of which is extremely costly (internal devaluations); Improve the quality of corporate investment and have governments and companies come together in strategic sectors. It is often claimed that the level of investment is low in the euro zone. This is not quite right: it is high; the problem is not quantity but quality and the nature of the investment; Switch from tax competition, which can lead to an unacceptable race to the bottom in the case of some tax rates, to tax coordination.