In terms of the crisis in the eurozone, much has been done to lessen its impact on European economies. Spanish banks were recently granted a bailout without having to go through their government and Cyprus became the fifth member state to request aid from the European Financial Stability Facility (EFSF), to cover a €1.8 billion capital shortfall.

While these measures have come at the relief of investors and consumers alike, there are enduring problems that must be addressed. We can bail out big banks or pump money into ailing countries, but this will not replace the need for actual long-term solutions. These solutions may come in many shapes and forms, but one thing is certain: We need a more competitive Europe. Increasing competitiveness will improve labour productivity and comparative advantage and will pull Europe out of the economic abyss it seems to have fallen into.

Indeed, Europe has lost some of its stride in recent decades, especially when compared to the US, China and other regions of the developing world. The European Union’s average growth rate last year was 1.6%, down from 2% the year before. Competition and growth were declining even before the economic crunch. GDP was down from 3.3% in 2006 to 0.4% in 2008 right before the crisis struck. The US’ rate in 2011 was slightly lower than the EU average at 1.5%, but the country is strong in competitiveness for multinational activity. There is hence a need for the European Union to catch up by making its markets more attractive for business activity and investment.

The bulk of the competitiveness problem lies in Europe’s so-called periphery, in places such as Spain, Portugal and Greece. Whilst the reasons for decline vary from country to country, overarching structural reforms need to take place in order to increase competition and truly fix the zone’s problems.

Competitiveness evades the area’s core as well. France, for example, has seen a greater loss of industrial jobs than any other European country over the past decade. Even for countries running trade surpluses, weak productivity is a major concern. Beyond states’ levels of aggregate spending and output, it is important to look at the bigger picture – and that is that the European Union as a whole needs to improve its performance in the fields of innovation and entrepreneurship, research and development, and Information and Communication Technologies (ICT). Some attribute this weakness to shortcomings of the European patenting system for technology. Others claim that more needs to be done in terms of life-long learning, to facilitate the development of new skills.

It is important to note that measures to increase competition must be sustainable, just as those to fix the eurozone must focus on the long-term. They must focus not only on improving immediate productivity, but also on education and training, development of new skills and reforming structures and policies to foster more inclusive economies. Long-lasting measures should include changes to policy and the structure of markets to guarantee more labour flexibility and to make them conducive to enterprise growth. It is equally important to reduce any barriers that businesses may face, such as inadequate financial support, complex administrative procedures and lack of skilled labour. On the other hand, high unemployment for low-skilled workers is also an issue, one which will require additional structural reform. The problem is not for lack of resources; on the contrary it lies at the heart of the system and policies and Europe hence needs to utilise the full potential of its assets in order to address current shortcomings.

The good news is that the European Union is already actively committed to boosting competitiveness and growth in the region. Last year, for instance, the European Commission tabled the new Programme for the Competitiveness of Enterprises and SMEs (COSME). This programme, with a budget of €2.5bn, will cover the period from 2014 to 2020. Amongst its objectives count the creation of a growth-enhancing business environment in Europe, fostering entrepreneurship in the region as well as ensuring the sustainable competitiveness of companies in the EU. The EU thus aims to boost growth and job creation whilst helping industries in individual member states to become more competitive. At a summit in June, European leaders further outlined growth-inducing measures, including a package to aid small- and medium-sized enterprises (SMEs) and youth employment efforts. In addition, the Committee on Economic & Monetary Affairs recently issued a report addressing the importance of attracting foreign direct investment, which includes provisions for boosting research and innovation, improving access to finance and addressing human capital needs. Hopefully, these measures will be put into motion in the coming years and will boost competitiveness in the region. Most importantly, Europe must continue on the path of improving the fluidity of workers and capital and expanding the single market. Progress in these areas will inevitably increase competition and guarantee the resilience of the European Union.

David Casa is a Nationalist MEP