Yes, market opening does work
Today, the European Commission has made public a Copenhagen Economics study on the overall economic impact due to market opening to promote competition in network industries. The study shows that market opening of network industries has generated economic growth and created new jobs.
“Overall, we confirm the existence of economic gains. We estimate that market opening in network industries increases overall EU15 welfare by 1.9 percent or €98 billion and gives rise to additional employment corresponding to about 500.000 jobs until the turn of the century”, says Dr. Claus Kastberg Nielsen, CEO of Copenhagen Economics.
The study shows that the member states that have been quick to implement the EU directives on telecommunications and electricity have gained more than the member states that have implemented the directives more slowly. This is due to the overall gains being primarily associated with market opening in telecommunication and electricity above all becausee these two sectors account for two thirds of all output from the network industries covered by the study.
“We find that the Nordic member states (Sweden, Denmark and Finland) have been the most aggressive in opening their markets for telecommunications and electricity, and they are also the ones reaping the highest welfare and employment gains. Other member states such as Greece have hardly gained anything in terms of welfare and employment, which is due to slow Greek market opening in telecommunications and electricity”, says Dr. Kastberg Nielsen.
The study covers all EU15 member states over the last 10-15 years. The network industries included in the study are: Electricity, telecommunication, rail passenger transport, rail freight transport, urban transport, air transport, natural gas, and postal services.
Further information: Dr Claus Kastberg Nielsen
Market opening sectoral analyses
Summary of country specific gains
Link to the Commission homepage