Europe must replace words with deeds on economic reform and stop placing national interests before the goal of catching up with the United States, the European Commission said yesterday.

"A delivery gap exists. Deadlines for decisions and their implementation are being missed, often in the face of short-term sectoral or political interests," the Commission said in an annual review of its reform plans entitled "The Lisbon Strategy, Making Change Happen".

European leaders pledged in Lisbon in 2000 to make their economy the most competitive on earth by the end of the decade. But reality has not kept up with the lofty rhetoric, the Commission complained.

"The Commission has done its job. We have delivered on time," European Commission President Romano Prodi told a press conference. "But final delivery depends on the member-states and parliament."

The EU's inability to keep its commitment to reform has contributed to the weak performance of the euro against the dollar since its 1999 launch, analysts say.

But the Commission has been encouraged by the smooth roll-out of euro cash since January 1st and wants to press ahead with a raft of initiatives to boost growth and employment. These are intended to narrow the gap with the US without abandoning a system supposed to be fairer for Europe's poor.