Nobel Prize winner in economics Philippe Aghion has urged the European Union to lower internal barriers and establish "a true single market" in an interview on Euronews.
The French economist said a fully integrated internal market for EU goods and services will boost competition and innovation in the bloc, which he argued is lagging behind the United States and China amid rising geopolitical tensions.
"We don't have a true single market and it is absolutely necessary," he told Europe Today, Euronews' flagship morning show. "Each member state has its own regulation, which they add on top of European regulations. That's what we call gold plating."
His comments echo recommendations from former European Central Bank president Mario Draghi, a highly influential figure in European circles, and Enrico Letta.
Both published two reports widely last year calling on the EU and its member states to bolster the single market, cut red tape and work more closely together. Draghi said the EU should undergo a process "of radical change or face slow agony."
Aghion argues that part of the reason Europe is falling behind Washington and Beijing in innovation is a culture that punishes and shames failure. In the US, failure is considered a natural part of the process before a breakthrough.
"In Europe we don't take enough risks, we don't forgive failure short-term failure," he said. "We have to encourage failure, because if you fail, it means you are trying to do something new."
The Nobel prize winner said Europe will have to deploy more capital in high-risk sectors connected to innovation and called for financial institutions and venture capital to play a bigger role in the EU. "We don't have financial institutions that encourage risk-taking enough," he added.
He also called on member states and EU institutions to invest more in critical sectors and to simplify regulations that discourage new players from entering the market. "We regulate too much, but we don't invest enough. We're a budgetary dwarf," he said.
Aghion won this year's Nobel prize, alongside fellow economists Peter Howitt and Joel Mokyr, for their "pioneering research into the relationship between technological innovation and long-term economic growth".
Europe Today broadcasts daily on Euronews at 8am co-hosted by Euronews chief anchor Méabh Mc Mahon and EU editor Maria Tadeo.
