IRELAND IS ranked as one of Europe's most competitive economies in two surveys due to be published today by influential European think tanks.

The Brussels-based Lisbon Council's "European Jobs and Growth" monitor ranks the Republic as the second most competitive economy in Europe, up from fourth place in 2007. A separate survey published by the Centre for European Reform in London places Ireland sixth out of 27 EU states, up from eighth last year.

The Irish economy scored well in five of the six economic criteria used by the Lisbon Council to prepare its report - economic growth, productivity growth, employment, human capital and fiscal sustainability. Only Finland is ranked higher in the survey.

The report praises Ireland for maintaining strong economic growth, boosting productivity, ensuring that 70 per cent of its people are in work and creating an education system that offers easy access to third-level colleges. The only weakness highlighted is Ireland's low investment in research and development (R&D) and environmentally friendly technologies, where it is ranked 14th out of the 14 EU states surveyed.

Despite a sharp drop in housing construction and a resulting slowdown in economic growth, the report says a rise in public construction spending and brisk private consumption can shield the Irish economy from the current market turmoil.

"Ireland's growth potential, which uniquely among European countries has been solid for several decades, is far from exhausted," concludes the Lisbon Council report, which was prepared in co-operation with the research arm of the insurer Allianz.

The Centre for European Reform think-tank ranks the Republic as the sixth most competitive economy out of the 27 EU states, two places higher than last year. It notes a significant improvement in the use of broadband, up from 13 per cent of households in 2006 to 31 per cent in 2007. It also praises e-government services for business, a relative lack of bureaucracy and the low cost of setting up new businesses in the Republic.

However, it criticises the high cost of broadband services and slow deregulation in certain sectors, such as rail services.

Both reports present different views on Europe's overall economic performance. The Centre for European Reform concludes that many states are still failing to reach the economic reform targets set under the Lisbon strategy announced in 2000. It notes that few states spend more than 3 per cent of GDP on R&D or have 70 per cent of their population in work. It concludes that Europe faces a "daunting economic agenda" given the current financial turmoil and increasing calls for protectionism as China's economy continues to expand.

The Lisbon Council report is optimistic about the EU economy, noting that it is growing faster than the US economy for the first time in more than 10 years. Productivity is also growing faster than the US, which it says is evidence the Lisbon strategy is working.

COMPETITIVE RANKING 2008

1st: Finland(2007 ranking: 3rd)

2nd: Ireland(2007 ranking: 4th)

3rd: Denmark(2007 ranking: 1st)

4th: Sweden(2007 ranking: 2nd)

5th: Poland (2007 ranking: 6th)

6th: UK(2007 ranking: 9th)

7th: Greece(2007 ranking: 7th)

8th: Germany(2007 ranking: 11th)

9th: Netherlands(2007 ranking: 5th)

10th: Spain(2007 ranking: 10th)

11th: Belgium(2007 ranking: 8th)

12th: France(2007 ranking: 12th)

13th: Austria(2007 ranking: 13th

14th: Italy(2007 ranking: 14th)