In March 2000, the EU Heads of States and Governments agreed to make the EU "the most competitive and dynamic knowledge-driven economy by 2010". Although some progress was made on innovating Europe's economy, there is growing concern that the reform process is not going fast enough and that the ambitious targets will not be reached.
In March 2000, EU heads of state and government agreed on an ambitious goal: making the EU "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".
In particular, it was agreed that to achieve this goal, an overall strategy should be applied, aimed at:
- preparing the transition to a knowledge-based economy and society by better policies for the information society and R&D, as well as by stepping up the process of structural reform for competitiveness and innovation and by completing the internal market;
- modernising the European social model, investing in people and combating social exclusion;
- sustaining the healthy economic outlook and favourable growth prospects by applying an appropriate macro-economic policy mix.
The Lisbon Summit was designed to mark a turning point for EU enterprise and innovation policy: it saw the high-level integration of social and economic p olicy with practical initiatives to strengthen the EU's research capacity, promote entrepreneurship and facilitate take-up of information society technologies.
The main issues for the realisation of the Lisbon agenda were:
- the necessary investment in R&D, that is three per cent of GDP;
- reduction of red tape to promote entrepreneurship;
- achieving an employment rate of 70 per cent (60 per cent for women);
However, nearly half-way through the implementation period, many critics complain that not much progress has been made on achieving these ambitious goals. After the recent global economic downturn, governments seem to have been reluctant to push through difficult and unpopular economic reforms or to focus on increasing their national budgets for research and innovation. Many economists claim that, as a result, the EU has lost valuable ground on its main competitors, the US and Japan.
In its traditional Spring Report, which served as a basis for the Spring Summit in March 2004, the Commission set out to assess the progress made towards the Lisbon goals. This report was accompanied by the Implementation Report of the Broad Economic Policy Guidelines 2003-2005, the Joint Employment Report, and the Implementation Report on the Internal Market Strategy. All these reports paint a dire picture of the state of the EU's competitiveness.
The Commission has therefore urged governments to give the Lisbon strategy fresh impetus. In particular, it outlined three priority areas:
- Investment in networks and knowledge: starting the priority projects approved in the 'European Growth Initiative';
- Strengthening competitiveness in industry and services: stepping up efforts in the areas of industrial policy, the services market and environmental technologies;
- Increasing labour market participation of older people: promoting active ageing by encouraging older workers to work for longer.
At their Spring Summit meeting in Brussels on 25-26 March, EU leaders adopted conclusions on strategies to meet the Lisbon targets. "The European Council reaffirms that the process and goals remain valid. However, the pace of reform needs to be significantly stepped up," reads the paper. Moreover, governments pledged to "demonstrate the political will to make this happen", and they appointed the former Dutch Prime Minister Wim Kok to head a high-level expert group to give new impetus to the Lisbon strategy.
The group's mission was to assess the instruments and methods used to date and to involve Member States and stakeholders more closely to ensure the Lisbon objectives can be delivered. The Kok Report was presented to the European Commission and the European Council at the beginning of November 2004 (see EurActiv 3 November and 4 November 2004). It paints a gloomy picture on the progress made in the last four years, stating that the “disappointing delivery” is due to “an overloaded agenda, poor co-ordination and conflicting priorities”. However, the report puts the main blame on the lack of political will by the member states.
(January - June 2004) will use the mid-term review to:
- take stock of the strategy;
- refocus priorities;
- improve the governance and implementation of the strategy;
- implement a specific communication strategy by target groups.
The Presidency is committed to preserving the strategy of developing synergies between the economic, social and environmental pillars to achieve the aims of the Lisbon strategy. Moreover, it wants to confirm the target of 2010 as the date by which the Member States as a whole, in each area of the strategy, will have implemented the reforms in a self-sustaining manner demonstrating a notable change of trend.
Furthermore, the Presidency endorses the Kok Report's suggestion to create national action programmes to improve the governance of the Lisbon process, and it proposes to discuss a streamlining of the Open Coordination Method. The Presidency believes that the sound functioning of the Open Coordination Method will be judged when the national achievement of objectives as defined in Community action plans converge.
European industry and employers federation UNICE has pointed out that the EU's failure to make progress towards the Lisbon goals is mainly due to insufficient economic reform in Member States. In particular, industry believes that excessive costs and regulation stand in the way of getting Europe's competitiveness back on track, and UNICE has therefore called to "Free Gulliver" by cutting red tape for businesses. For industry, the focus must be on:
- better regulation with compulsory business assessment for new legislative proposals;
- reforms of social security systems;
- increased investment in R&D and innovation by Member States, universities and industry;
- reductions of company tax levels;
- better education on entrepreneurship;
- more flexible regulation of labour markets;
- implementation of internal market legislation.
The European Trade Union Confederation (ETUC) supports a discussion on growth and employment-friendly reforms provided that reforms "benefit workers, respect social dialogue and unlock the social dimension of Europe". However, ETUC has emphasised that structural reforms will not be enough to deliver on the Lisbon objectives: policies also have to ensure that growth occurs effectively. Trade unions reject the one-sided use of the Lisbon strategy to legitimise "neo-liberal policy approaches", saying that "the Lisbon Strategy must be implemented in a manner that is economically, socially and ecologically balanced."
Eurochambres, the association of European Chambers of Commerce and Industry, maintains that Member States must repair credibility in the Lisbon process. In particular Eurochambres urges governments to
- introduce more immediate focus to the process at national and European levels;
- review the open method of co-ordination;
- strengthen the position of the Competitiveness Council.
UEAPME, European Crafts and SMEs employers association, has stressed the need for EU decision makers to make policy making more coherent and competitiveness-minded in order to create the right regulatory framework for Crafts, SMEs and business in general and revitalise the Lisbon Strategy. Saying that intrinsic weaknesses of the Open Method of Co-ordination has contributed to the delivery gap of the Lisbon reforms, UEAPME has called for stronger, more compelling instruments to be created.
The Green/EFA group in the European Parliament, WWF and other environmentalist groups have pointed out that the EU's Sustainable Development Strategy, which was adopted at the Gothenburg Council in June 2001, was made an integral part of the Lisbon Strategy. They call upon Member States and the Commission to recognise that economic growth, social cohesion, and environmental protection must go hand in hand.
The further implementation of the Lisbon goals is high on the Luxembourg Presidency's agenda, with a specific focus on the European area of knowledge as well as improving the governance of the Lisbon process.
Marking the half-way point for the Lisbon agenda, the spring European Council of 22-23 March 2005 placed renewed focus on growth, innovation and employment and encouraged the strengthening of social cohesion and the mobilisation of national and community resources in the Strategy's economic, social and environmental dimensions. For futher information on the revamped Lisbon proposals and to keep track of all the latest developments please see EurActiv's Linksdossier on the Relaunched Lisbon Strategy.
The integrated guidelines for growth and jobs for the period 2005-2008, spearheading the national reform programmes or action plans of member states, will be discussed at the June European Council.