Following the disappointing mid-term review of the Lisbon strategy which had been launched in 2000 with the aim of making the European Union the most dynamic and competitive economic region in the world by 2010, last year's spring EU summit determined to revive the strategy. On March 23/24 2006 EU leaders met again to discuss how to proceed with the Lisbon process.
Will the revival of the Lisbon process succeed?
We have developed an indicator which provides a timely measure of progress on fulfillment of the Lisbon targets. The indicator focuses on five macroeconomic variables which shed particular light on the increase in growth and employment momentum. These encompass economic growth, the participation rate, per capita income, labor productivity and the investment ratio. Apart from an overall figure for the EU-15 countries, the indicator also provides a breakdown for the large EMU countries Germany, France, Italy and Spain.
Although the indicator has shown an improvement of late, it still illustrates that the targets are still a long way off. So the question now arises whether the national action plans can provide the necessary boost. Broadly speaking they focus on how the European economies can be modernized and the welfare model upheld given the central challenges of growing globalization, rapid technological change and an ageing domestic population. Breaking down our Lisbon Indicator into the big European member states Germany, France Italy and Spain sheds light on the respective need to enact reform measures. Against this backdrop we have analyzed the national action plans of the EMU heavyweights.
It transpires that the starting points differ: Germany's main focus needs to be on developing a consistent employment strategy in the low-wage sector, safeguarding the funding of health and nursing care insurance in the long term and a reform of corporate taxation. In France the battle against unemployment is at the forefront. Italy's economy is still characterized by weak productivity growth and an inadequate export base. The main challenges for Spain lie in boosting international competitiveness and reining in credit-fueled domestic demand in order to place growth on a sound footing.
Claudia Broyer
Jutta Kayser-Tilosen
Wolfgang Leim
David F.Milleker