EU: Ireland receives more praise than blame in a series of economic reports issued by the European Commission yesterday in preparation for the European Council meeting.
The Commission concludes that Ireland is on course to complete "a gradual transition towards its new pace of sustainable growth".
In its annual report on the broad economic policy guidelines, the Commission suggests that wage claims will have to be moderated if Ireland is to protect competitiveness.
It notes with approval efforts to improve the efficiency of public spending, particularly in the health service. But in its assessment of Ireland's contribution to making the EU a more competitive economy, the Commission does not place Ireland among the front-runners who have "better overall achievements to date".
The vanguard, in the commission's judgment, is made up of Denmark, Luxembourg, the Netherlands, Austria, Sweden and the UK. At the bottom of the class, the relatively poor performers are Greece, Spain Italy, and Portugal.
The commission lists both Irish achievements and shortcomings.
Chief achievements are seen as high medium-term growth at 5 per cent.
High and increasing labour productivity, well above the EU average.
A significant reduction in long-term unemployment.
Improvements in the performance of youth education.
Greater competition in telecoms and public transport and new competition rules for electricity and gas.
A markedly improved performance in implementing EU legislation on the single market.
The shortcomings are listed as:
Being among the worst performers in the EU for Kyoto and burden-sharing targets to reduce the production of greenhouse gases.
High inflation: Low levels of spending on research and development.
The EU's largest decline in business investment.
The Commission's report acknowledges that recent efforts to improve the level of spending on research have been made but will only take effect in the medium term.
The Commission also points out that Ireland's strong economic growth in recent years has been accompanied by "sizeable improvements" in energy intensity.
It acknowledges increased competition in some economic sectors but notes that the Competition Authority is still reviewing the medical, legal, engineering and architecture professions.
The report also urged the UK to improve the quality and efficiency of public services. Low levels of productivity must be improved and the high numbers of workers claiming sickness and disability benefits reduced, the report said.
Germany is suffering from "structural weakness" in its economy, with falling employment, a rising public deficit, and a too-rigid labour market.
French efforts to boost the economy have failed, with a marked deterioration in economic performance, virtually no growth last year and an urgent need to reduce deficits. - (PA)