Who will keep member states up to the mark?

Date: 03/05/01

For the first time next month, the EU executive publishes a 'scorecard' based on the innovation goals it set itself at the Lisbon summit. Dick Leonard fears the Commission could be in for a disappointment

Was the Stockholm summit - now five weeks gone - quite the "miserable failure" that some observers, notably The Economist, concluded at the time? There were undoubtedly disappointments.

Energy liberalisation was held up by France, postal deregulation by Britain, patent reform by Spain, while the dispute between the UK and Spain over Gibraltar airport blocked progress on the integration of air traffic control. The only headline success was the adoption of the Lamfalussy report on financial services.

Yet the original purpose of the summit was not to reach agreement on specific proposals, but to review progress on the ten-year programme set out a year earlier in Lisbon to make the EU "the most competitive and dynamic knowledge-based economy in the world by 2010".

The historic importance of the Lisbon project may well prove comparable to the 1992 programme to create a single European market adopted at the Milan summit in 1985, or the plan for a single currency incorporated in the Maastricht treaty in December 1991. There was, however, a striking difference in the methods prescribed for achieving the objectives.

At Milan, a detailed legislative programme involving the passage of some 300 EU directives and regulations was approved, while at Maastricht strict criteria were set out which member states would have to meet before they could participate in the single currency. At Lisbon, there was very little of this prescriptive rules-based approach.

The targets set would, instead, be met, it was hoped, by peer-group pressure, bench marking and the adoption of best practice, the so-called "open method of co-ordination", with a bare minimum of legislative back-up. The role of the Commission in the process was to act as a crossroads for the exchange of information and to keep a scorecard of the progress made by each of the member states. The Commission's scorecard on the innovation goals set at Lisbon will only be published for the first time next month, and the progress report which it made in Stockholm was couched in general terms, though it was broadly positive.

For now, the gap has been filled by the enterprising London-based think tank, the Centre for European Reform. It has just published an up-to-date assessment, entitled The Lisbon Scorecard: The Status of Economic Reform in Europe by Edward Bannerman (free from CER, 29 Tufton Street, London SW1P 3QL).

In this report, Bannerman makes an overall assessment of progress, and breaks the programme down into a large number of sub-divisions, on each of which progress is measured on a five-point scale (from A to E). In addition, the author identifies the "heroes" of economic reform, but also the "villains" who are holding up progress (see table for individual examples).

Bannerman concludes that progress has recently accelerated, and predicts that next year's report - due in time for the Barcelona summit in March 2002 - will show a marked improvement. This is, perhaps, being overly-sanguine. It is not yet clear that the largely voluntarist methods prescribed at Lisbon will be fully effective.

The Commission lacks both carrots and sticks to keep the member states up to the mark, and it seems that the presidency has so far acted as the main spur, with the Swedish State Secretary for Industry, Anna Ekström, apparently making heroic efforts during the past few months.

Not all presidencies are likely to have somebody of similar calibre at their disposal, and the EU heads of government should seriously consider appointing a heavyweight figure, comparable to Javier Solana in the foreign policy field, with a mandate to oversee the process.

Failing that, there is a definite risk of it running into the sand, and ending up as one of the Union's big disappointments rather than its next major achievement. The overall mark awarded for the first year's progress is only moderately good at C+ .

The fields in which good progress has been made include information society and telecoms (both B+) and research and development, state aid and competition policy and broadening the workforce (all B-). The lagging sectors have been the regulatory environment (D+), utilities and transport and the upgrading of skills (both D).

Dick Leonard has been writing on European issues for over 20 years for The Economist, The Observer, Europe magazine and leading newspapers across the world. A former assistant editor of The Economist, he has also been a British Labour MP and is the author of numerous books, including The Economist Guide to the European Union and the recently re-published Elections in Britain.

Major analysis of progress made on the priorities laid down at the European Council, Lisbon, March 2001 to make the EU 'the most competitive and dynamic knowledge-based economy in the world by 2010'.