Nosemonkey's EUtopia

In search of a European identity

Measuring Europe’s Progress in Reform

Via Erkan, the World Economic Forum‘s Lisbon Review 2006 (1 meg PDF) – “Measuring Europe’s Progress in Reform” – is out, seeing how far the EU has got with the Lisbon Strategy, six years in to the ten year plan. The basic aim of the thing was to make the EU the most competitive economy in the world, so very few ever expected it to really come to fruition, but still… Worth a pop, eh?

But then last year the EU bigwigs realised that, erm… hardly any progress had been made, so it was time for a rethink – focussing more on a short-term attempt to boost jobs, with the longer-term goals to follow. It all makes sense, after all:

“The benefits of reaching the Lisbon goals are potentially quite significant. A recent study by the European Commission estimated that, if Europe were able to reach the Lisbon goals, gross domestic product (GDP) could increase 12-23% and employment could increase by as much as 11%. Even if these estimates are highly optimistic, implementing the strategy offers significant potential gains. Given the many demographic and economic challenges facing the EU, and despite recent improvements in Europe’s overall economic outlook, it would seem that there is no time to lose.”

And, as the report is based on interviews with CEOs of various EU countries,

“the results can be interpreted as the business community’s perspective on Europe’s relative performance in meeting the Lisbon goals. Since business leaders make many of the investment decisions in their economies, their perceptions are clearly related to the prospects for economic growth.”

They’ve done all kinds of complex ranking systems to work out each country’s relative competitiveness in eight different areas: Information Society, Innovation & R&D, Liberalisation, Network Industries, Financial Services, Enterprise, Social Inclusion and Sustainable Development. A score of 7 would be perfect – and the EU25’s average is 4.84 (compared to a score of 5.45 for the United States and 5.28 for East Asia (which, for the purposes of this study, means Japan, Hong Kong, South Korea, Taiwan and Singapore). Six EU countires rank higher overall than the US – Denmark, Sweden, Finland, the Netherlands, Germany and the UK.

The UK comes top in only one area, Financial Services (with a score of 6.47 – compared to the US’s 5.97, East Asia’s 5.54, an EU25 average of 5.6, and second placed Germany’s 6.39 – and our lowest rank is 9th for Social Inclusion. Overall the UK comes 6th with a score of 5.5 – compared to top-ranked Denmark’s 5.76 and bottom-ranked Poland’s 3.76 (interestingly, Italy – rather than another of the new member states – is second from bottom with 4.17; the highest-ranked new member is Estonia, in 12th place with a score of 4.93). There are also various comparisons to potential future EU members Turkey, Romania, Bulgaria, Croatia, Macedonia and Serbia & Montenegro (still assessed together for this report, despite Montenegro’s recent vote for independence).

For statistics freaks, I’ve copied out the tables from the PDF. Only one will fit within this blog’s layout, though, so have that, and the rest as links:

Table 2: Ranking and Scores of EU Countries
Table 3: Lisbon Scores Comparing the EU, the US and East Asia
Table 4: Ranking and Scores of Potential EU Member Countries
Table 5: Comparing the EU and the Accession Countries

And now a brief edited summary of the conclusion, as all those numbers have made my head go funny:

“there continues to be much variation in the performance across the EU25 countries, with the Nordic countries doing very well, while some southern European and recent accession countries trail behind…

the greatest gaps between the EU’s performance and those of the comparators are in the development of an information society, innovation and R&D, and in the enterprise environment, all areas in which both East Asia and the US outperform the EU by a wide margin… With respect to the accession and candidate countries, our analysis shows that much remains to be done to bring all of them up to the average competitiveness level of the present EU membership… Perhaps more surprising, Croatia and Turkey slightly outperform Poland, a current EU member [my emphasis]…

The EU itself noted that it is unlikely that the targets will be reached by 2010, as initially planned. But given the potential benefits, it seems clear that it would be useful to continue to pursue these policies beyond the 2010 deadline. Even if the goals are not achieved within the next four years, the strategy set in Lisbon continues to represent a very useful policy framework in itself.”

So, not a huge amount of progress, but still… And being able to have some kind of ranking system with which to compare the various EU member states (even if it is a ranking based on largely arbitrary, subjective analysis) should prove somewhat useful.

The abject failure of Poland in pretty much every area (her highest score was a mere 4.23 for Financial Services, and even then she came last) – especially considering that it is outperformed by both Croatia and Turkey – is particularly intriguing. How can the continued exclusion of Turkey and Croatia be justified when Poland is already in the club and doing worse than them? More to the point, why was Poland admitted in the first place if her performance is that shoddy? Hell, if the EU seriously wants to be able to compete on equal footing with the US, there surely need to be somewhat tighter policies on who gets in to prevent the likes of Poland dragging the overall effectiveness of the thing down?

Still, too late now, I suppose…