Lisbon-lite might just float in 2006

By Anna McLauchlin

Date: 12/01/06

After years of disappointment about the EU's Lisbon Agenda of economic reform, there is a whiff of optimism in the air for 2006.

The agenda was revamped to focus on Lisbon-lite - the streamlined core of growth and jobs.

Discussions at this year's Spring European Council will concentrate on a set of 25 reform programmes, which European leaders hope will increase national commitment to achieving the Lisbon goals.

The national plans were submitted to the European Commission late last year (Poland was the last to put forward its plan at the beginning of January). Commission President José Manuel Barroso will deliver his assessment on 25 January.

Annual reports have also been streamlined into a single document that member states will have to draft by the autumn of this year.

Because the plans are specific to the challenge facing individual member states, they provide a more detailed analysis of the action being taken by each government to revitalise their economies in the face of increasing globalisation and ageing populations.

The Nordic countries, headed by Denmark, are in the lead for the implementation of Lisbon policies, and Austria and Ireland have also made good progress. All have targeted labour market reform, the sustainability of public finances, investment in research and development and innovation, improvements to the business climate and commitment to education within their programmes.

If fully implemented, these could lead to the creation of up to 10 million new jobs in Europe between now and 2008 and a significant increase in R&D spending by 2010.

"Our assessment is that the quality is amazingly good," said Folker Franz of EU business association UNICE. "They have been well written and researched and there is good analysis of what needs to be done to boost EU economies."

The most significant change he cites in the plans is the attention to better regulation - reducing the burden of legislation on businesses. This year will see the conclusion of a programme to push regulatory reform up the political agenda both at national and EU level, which began in the Irish presidency in 2004.

A third of all member states are now introducing systems to assess the impact of legislation on businesses and three-quarters have set targets to cut regulatory red tape.

In its appraisal report on the plans however, the Economic Policy Committee (EPC) - a group of experts from national finance ministries and central banks that co-ordinates EU economic policies - sounds some notes of caution.

It points out that only a few member states have cited competition as a key challenge, despite the fact that good competition will drive innovation and choice for consumers as well as cutting prices.

Pension reform needs to be undertaken more urgently, the EPC report says, and although many member states have committed themselves to increasing R&D investment, the level of spending will still come in below the EU target of 3% of gross domestic product even if the plans are fully carried out. Finland and Sweden are currently the only member states spending more than this target.

The plans will be meaningless unless the measures planned are actually implemented, the report warns, and this is not a given.

For example, Italian business association Confindustria has already voiced concerns over the feasibility of funding some of Italy's plans to promote lifelong learning.

Article takes a look at the prospects of the revised Lisbon Strategy and the national reform programmes linked to it to have an impact in 2006. Article is part of a European Voice Special Report, 'The EU in 2006'.