Wednesday, 12 May 2010

Competitiveness in the EU: Who finished where and why?

Somewhat uncharitably, as in earlier blog posts, in EU Reflection Group delivered report: Project Europe 2030 (10 May 2010) we spoke about the “lost decade” of the EU’s Lisbon strategy for growth and jobs, and the next day, in Mario Monti: A new strategy for the single market, we said that the European Union and especially the member states had “squandered” the decade of the Lisbon strategy.

No need to take my word for it, though. Others have looked at these matters in detail.

First let us recall, in Lisbon 23 and 24 March 2000 the heads of state or government had set the European Union the new strategic goal for the next decade:

to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.


Now let us see what the World Economic Forum (WEF) has to say about goal attainment on the front page of The Lisbon Review. We find the following quote from senior economist Jennifer Blanke:

Ten yea[r]s after European leaders announced their intention of making the region the most competitive economy by 2010, Europe has not yet met that goal.

The headline of the detailed press release is to the point: The European Union failed to meet its goal to become the most competitive region in the world (9 May 2010).

Who finished where and why?

On the basis of the fifth and final assessment of the Lisbon strategy decade, just a few highlights and subjective remarks to set you thinking about competitiveness in the European Union:

• The Nordic countries Sweden, Finland and Denmark were the most competitive, followed by the Netherlands, Luxembourg and Germany. Is a social market economy based on equal opportunities the bane of competitiveness?

• Estonia, Cyprus, Slovenia and the Czech Republic, who were not yet EU members when the Lisbon decade started, finished ahead of many old member states. Dedicated reform efforts seem to pay off.

• PIGS: The old member states with less dynamics and competitiveness also happen to be among those with the bad enough public finances to have threatened the very existence of the eurozone: Portugal, Italy, Greece and Spain (not in that order regarding lack of competitiveness). Are they going to wake up during the decade of the EU 2020 strategy and start on a virtuous circle?

• The latest EU entrants, Romania and Bulgaria, generally perceived to have the highest levels of crime and corruption and the greatest challenges to establish the rule of law, are at the bottom of the league table. Are the EU’s powers to intervene after accession too weak?

You can read the full report:

World Economic Forum: The Lisbon Review 2010 – Towards a More Competitive Europe? (32 pages)

Ralf Grahn