By BridgeNews
London--Feb. 15--The European economy is undergoing a structural transformation which will see labor productivity rise to U.S. levels fuelled by heavy investment in information technology, Bank of France Governor Jean-Claude Trichet said in an interview in the London Evening Standard published on Thursday. Trichet said that European policy makers had a "duty" to ensure that this new economic paradigm became entrenched in the continent.
* * * In an interview brimful of upbeat comments on Europe's economic future, Trichet said: "We are experiencing a progressive change of economic culture, not only in France but also in all of Europe...It is our duty to help the maturing of this new 'paradigm', if I may use that word." Trichet said that although there was no sign yet in the official economic indicators of a turnaround in European productivity, that it would come. "When we ask chief executives of European multinational companies, not just French but German, Italian and British, they all tell us they are introducing exactly the same technological improvements in their plants in Europe as they have in the United States.
"With the spreading of investment in the same information technology through the productive sector, we have to expect, and we do expect in the EU, progressive signs of the labor productivity improvements as seen in the United States."
Trichet said that structural reform was underway in Europe, but implicitly acknowledged that greater political effort was needed to drive it through.
"I think there are two reasons why we should be able, in the medium term, to augment our capacity to grow. One is through structural reform we are proceeding with, and I see that it is proceeding," he said. "The main challenge now is to explain as frequently as possible to ordinary people why it is good to get more growth through structural reforms because at the beginning they can be a little bit painful. "The second element is the impact, on top of these structural reforms, of the new computing and communication technologies which are proceeding through the productive sector in Europe. So we do not see why we in Europe we could not see, after a certain delay, the phenomenon (of improving productivity) that has been observed in the United States." End Copyright 2000 Bridge Information Systems Inc. All rights reserved.