Citizens don't share business euphoria over economy[fr][de] 

The Spring 2007 Economic Outlook for the European Union published by BusinessEurope forecasts 2.5% economic growth throughout the EU during 2007 and 2008. At the same time, the report predicts, employment growth will be 1.2-1.3% per year, bringing unemployment down to 7.0% in 2008. Hourly wages are predicted to grow by 3% per year. 

The European Growth and Jobs Monitor , jointly published by Allianz Dresdner Economic Research and the 'Lisbon Council' Think-Tank, reaches equally optimistic conclusions: "Europe has finally turned the corner after years of disappointing performance. The Lisbon targets have come within closer reach than many had predicted." The reasons, the report states, are "the recent acceleration in labour productivity growth", which may be the "driven chiefly by the economic cycle", but is more likely to be induced by "structural improvements". 

The report points out that "notwithstanding lacklustre economic activity between 2001 and 2005, more than 10 million jobs have been created in the EU-15 since the launch of the Lisbon Agenda" and sees "employment rates on a rising trend, even if they are unlikely to be fully on target by 2010".  It goes on to say that "this achievement would not have been possible without the rather moderate development in labour costs and greater flexibility on the job market". 

At the same time, citizens seem to have much less trust in an economic recovery that will affect them any time soon. A Special Eurobarometer 'European social reality'  finds that only 41% of Europeans believe that their personal situation will improve over the next five years. For people aged over 55 and those who ended their education before the age of 15, the percentages of those who are optimistic are as low as 16 and 24% respectively. Among the same groups of the population, 34% find that their situation has deteriorated over the past five years. 

The report shows a clear correlation between bad experiences in the past and negative expectations for the future. The matters of greatest concern to EU citizens are unemployment, the cost of living and pensions. One third of Europeans expect their employment and economic situations to become worse over the next twelve-month period. 

In a consultation paper for the Commission , Roger Liddle and Frederic Lerais from the bureau of European policy advisers (the Commission's 'in-house think-tank') state: "The statistics show that Europe has a serious poverty problem. In all, 72 million EU-25 citizens - 15% - are at risk of poverty, with another 36 million on the verge of that risk." 

They add: "Poor children experience a disproportionate share of deprivation, disadvantage, bad health and bad school outcomes. When they grow up, they are more likely to become unemployed, to get low-paid jobs, to live in social housing, to get in trouble with the police, and are at a greater risk of alcohol and drug abuse as young adults. Moreover, in most countries, they are likely to transfer their poverty of opportunities to their own children. This has an economic, social and political cost which in a rational world should be set against the public expenditure costs of early interventions (assuming such interventions can be made effective) to reduce the risks of future negative outcomes and social exclusion." 

OECD Secretary General Angél Gurría speaking on 27 February 2007 at an event organised by the Lisbon Council, said: "There is, today, a very legitimate desire to maintain those features of European society which make it the envy of the world. But pessimism has been growing in the region – a fear of globalisation, a feeling of defensiveness, while an ageing population is raising concerns about the viability of pensions and healthcare. 

"There is a fear that the future has passed to Asia and that Europe's place in the world is declining. This is not what we think at the OECD. There is much to be done to improve European economic performance, but the goals and visions of excellence are already established and can be achieved." Gurría also stressed the importance of "advancing the reform agenda so that Europe is fully plugged into the knowledge economy" and "improving Europe's productivity".

In a recently issued report 'The New Social Europe' , Poul Nyrup Rasmussen and Jacques Delors of the Party of European Socialists find that "the potential gains are there to be made: European co-operation and the enlargement of the European Union to 27 member states represent the framework for potentially enormous new sustainable economic and social development. Europe is a global economic player - the single market is the largest economy in the world. Europe is both driving globalisation and affected by globalisation - we do not have to adapt passively, we can actively shape the future. Europe's people are living longer and healthier lives thanks to rising living standards and better working conditions. Europe can transform new knowledge, innovation and technologies into new welfare for the many." 

They add, however, that "the risks, at the same time, are of rising inequalities between rich and poor, between the young and the old, of failing cohesion in an increasingly diverse population, and of spiralling environmental degradation". The authors say, however, that "we can still tackle these challenges if we make the right choices", adding that  "this can only be done with the participation and trust of ordinary people. It is about enabling society, people, businesses, trade unions - all actors - for change. It is about ensuring that people can feel confident and able in a context of continuous change. Decisions are to be taken on how to make our societies inclusive, based on decent work, social dialogue, rights and opportunities for all. Decisions on finding a new balance between the active working population and a growing retired population."