Dr. Lorenz Weimann
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The study ranks countries according to six key criteria including economic growth, productivity growth, jobs, human capital, future-oriented investment and sustainable public finances.
Among the study’s key findings:
- Given the dramatic decline in performance over the past 12 months, the EU-15 will not be able to reach the Lisbon targets in 2009 nor presumably in 2010, with the current overall score of 0.84 – compared to 1.12 at the end of 2007.
- Finland tops the ranking, with strong performances in Human Capital (No. 1) and Sustainability of Public Finances (No. 1); only in the area of Future-Oriented Investment (No. 12) in plant and machinery does it do badly (although the country’s strong commitment to R&D investment – with annual spending at 3.45% of GDP, well above the Lisbon target of 3% – does much to compensate).
- Overall, Poland comes in at No. 2 with strong performances on economic growth and productivity growth, where it finishes No. 1 and No. 2, respectively. However, Poland’s poor performance on employment, where it ranks No. 13, casts a heavy pall on its otherwise strong performance.
- Netherlands showed the most improvement, finishing at No. 3, up six places from last year, based on strong performance in Economic Growth (No. 3) and Jobs (No. 2).
- Spain also rose six places, finishing at No. 6. Its biggest improvement was in Labour Productivity Growth, though here the success is somewhat ambiguous. Spain did improve its labour productivity, but mostly on the back of rapidly rising unemployment. By contrast, truly successful economies should be able to raise productivity and create jobs at the same time.
- Ireland fell the farthest, ending at No. 13, down nine places from last year. Its reliance on external trade and the importance of its financial services sector in national output made it particularly susceptible to the global economic downswing and international financial turmoil. GDP growth, productivity and public finances all deteriorated precipitously during the year surveyed.
- Italy came in dead last at No. 14 with an overall Lisbon score of 0.39. This suggests that Europe’s fourth largest economy must do more to meet future economic and social challenges.
- Germany finishes at No. 9, down slightly from its No. 8 performance last year. However, Germany records the biggest improvement in the Sustainability of Public Finances Sub-indicator (No. 6). This improvement – up three places from last year – is an important achievement, which shores up long-term prosperity and gives the country more scope to respond flexibly to the global downturn this year.
- Had the crisis not hit, six European countries – Finland, Greece, Netherlands, Poland, Spain and Sweden – would have been on track to fulfil their Lisbon targets by 2010 – a remarkable result, given the pessimism that surrounded this agenda just a few years ago. The success of Europe’s top performers shows the strength and depth of the economic recovery in the years 2005-2008. But the recent downturn is so severe that none of the countries surveyed can presently come up to the Lisbon goals..