The Republic was yesterday described as a "hero" for the way it has implemented the economic goals set down at the Lisbon EU summit in 2000.

In a report from the Centre for European Reform (CER), the Republic won praise for its "rapid productivity growth in recent years" and its ability to create new jobs. However, the level of poverty in Irish society was also highlighted in the report.

The CER yesterday published what it calls the "Lisbon scorecards", which investigated the speed of reform in individual EU member states. It is the fourth such publication from the CER.

At the Lisbon summit in the spring of 2000, EU leaders signed up to an ambitious economic reform programme designed to close the economic gap with the US. The report assessed the progress made in achieving these reforms.

Written by former business journalist, Mr Alasdair Murray, the report was highly complimentary of efforts by the Republic to improve its economic performance.

The report said: "Ireland, in particular, has made remarkable progress in raising both its employment and productivity levels over recent years: it now has the highest productivity level (measured as output per hour worked) in the EU."

The report said the Republic offered a role model to accession states. "Its education and employment policies offer a good example to other member states, particularly to accession countries that are keen to catch up with west European income levels."

But the Republic's economy did have some shortcomings said the report. "Ireland cannot yet match the Nordic countries in terms of its innovation record, while its rising wealth is not shared evenly across the country."

Based on the Irish performance the country was given a "hero" award, along with Sweden.

Overall, the report was mildly critical of progress across the EU in relation to Lisbon, describing it as "mediocre", with France and Germany categorised as "laggards" for their slow approach in reforming pensions and labour market.

Italy was the subject of the most robust criticism in the report. "Italy is classified as this year's villain. Its employment levels are low, its record of innovation and entrepreneurship is poor and the Berlusconi government still shies away from much-needed reform."

Speaking at the launch of the report in Dublin, the Taoiseach said member states were taking their Lisbon responsibilities "very seriously".

"I am delighted to see that we have been rated overall as one of this year's positive stories or heroes for our ongoing commitment to the Lisbon agenda."

He said he noted the positive score in relation to encouraging new small and medium-sized enterprises.