The Barcelona European Council

The Barcelona European Council

The EU’s ten-year plan to transform itself into
“the most competitive and dynamic knowledge-based economy in the
world by 2010” is running out of steam. The forthcoming summit in
Barcelona on March 15 th and 16 th needs to re-energise Europe’s
faltering commitment to the ‘Lisbon agenda’ of economic reform.

Many Europeans like to think of their continent
as a global economic superpower. But when compared to the US over
the last decade or so, Europe looks like a laggard. From 1990 to
2000, the EU achieved only one year of economic growth above 3 per
cent. In contrast, the US economy experienced just one year in
which its economy grew by less than 3 per cent. The gap between GDP
per capita in Europe and America is now at its highest level since
the early 1960s.

To tackle this under-performance, EU leaders,
meeting in March 2000 in Lisbon, agreed on an ambitious ten-year
programme that was designed to raise Europe’s GDP by around 40 per
cent and create 20 million new jobs. But the EU has made only
limited headway, with many deadlines already missed. Spain, a
strong advocate of structural reform and current holder of the
rotating EU presidency, will host this crucial gathering of EU
leaders to review progress. British Prime Minster Tony Blair has
even described the Barcelona summit as “make or break” for the EU’s
economic reform agenda.

However, the current political and economic
environment continues to present a number of obstacles to progress.
The effect of the global downturn has made many member-states
reluctant to embark on the kinds of bold economic restructuring
that may result in short-term job losses. Elect ions later this
year in France and Germany have further muted discussion of radical
reforms and the hard choices that Europe faces.

For the full analysis on the challenges facing
the Barcelona Summit, see the

CER policy briefing on Barcelona.

is head of the business and economics unit of
the Centre for European Reform.

For more Centre for European Reform (CER)
analyses go to the

CER website.