Auteur: | By Richard Carter
EUOBSERVER / BRUSSELS - The EU's economic targets for 2010 are set to be seriously missed, according to a draft of a long awaited competitiveness report, obtained by the EUobserver.
The hard-hitting document, which assesses the EU's position in its bid to become the most competitive, knowledge-based economy in the world by 2010 (known as the Lisbon Agenda) warns that "too many targets promise to be seriously missed".
To be officially presented to EU leaders next month, the draft report foresees devastating effects if the Lisbon process is not invigorated.
"What is at risk ... is nothing less than the sustainability of the society Europe has built and to that extent, the viability of its civilisation", says the paper, drawn up by 13 experts led by former Dutch Prime Minister Wim Kok.
The working population will be unable to sustain "Europe's growing army of pensioners", economic growth will "stagnate" and institutions face "contraction and decline".
"In sum, Europe has lost ground to both the US and Asia; its societies are under strain; and some ugly political forces are beginning to manifest themselves", is the gloomy conclusion of the 37 page draft.
Enlargement to make things harder
While the enlargement of the EU to 25 member states is described as "a welcome expansion", it has "made European-wide achievement of the Lisbon goals even harder".
The new member states have lower employment rates and productivity levels, making it more difficult for the EU to catch up with the US in these respects.
However, the rapid growth of the new member states is "a positive aspect of enlargement ... creating an area of economic dynamism in East Europe", says the report.
Many - including some finance ministers - have proposed that the deadline of 2010 be pushed back to allow the EU more time to achieve its goals.
But the report rejects this unequivocally and urges ambition in the EU's aims. "Should the 2010 deadline be lifted? Again no".
"Lisbon should not be regarded as a one-off objective to be disregarded after 2010 even if every target had been achieved; rather it is an ongoing process aimed at securing Europe's future as a high productivity, high value-added, high employment economy".
Don't copy the US
Although the EU is aiming to catch up with the US, it should not aim to "become a copy-cat US - far from it", recommends the report.
"Europe has made its own distinctive choices about the social model that it wants to retain; whether life expectancy, infant mortality rates, income inequality or poverty, Europe has a better record than the US and wants to preserve and improve".
However, the authors of the text concede that "Lisbon is not a picture of unrelieved gloom, as some like to paint".
Since the launch of the Lisbon process, over six million jobs have been created whereas the employment rate in the US has fallen.
But the EU-15 still needs to create 11 million new jobs by 2010 if it is to succeed in its target of having a 70 percent employment rate by this time.
More innovation, please
The report recommends, amongst other things, an increase in innovation, harmonisation of the way corporate tax is calculated and cutting red tape for businesses.
But the message to EU leaders is clear: "halfway to 2010, the overall picture is very mixed and much needs to be done in order to prevent Lisbon from becoming a synonym for missed objectives and failed promises".