EU: The European Union's ambition to become the world's most dynamic and effective economy by 2010 is not being realised, according to a highly critical report from the European Commission, published yesterday.
The President of the Commission, Mr Romano Prodi, issued what he described as "a wake-up call" to national governments. "Member-states do not seem to realise that 2010 is around the corner. Four years after Lisbon it is clear that we are going to miss our mid-term targets," he said.
Mr Prodi called on the meeting of EU leaders on March 25th and 26th, which will be chaired by the Taoiseach, to put new impetus into economic reform.
The Tánaiste, Ms Harney, also called for greater efforts, telling the European Parliament that by some measures the EU was further away from its goal than four years ago. She said the EU had no alternative but to pursue the agenda of economic reform identified at the Lisbon European Council. "Maybe some dates will slip but if we give up on the process, the policy, the agenda, then we will just see more unemployment," she said.
The Taoiseach welcomed the Commission's report, which, he said, was critical in assessing what had been achieved and identifying what each individual country still had to do.
The Commission concludes that the gap in labour productivity between the US and the EU had widened in 2003 and now accounts for 40 per cent of the difference between the average wealth generated per person in the EU and US.
The Commission chides the national governments for their slow pace of economic reform, and the poor state of public finances. It observes that only five states managed to keep their budgets in or near to surplus. And of the others, "only Ireland, the Netherlands and Portugal" showed a marked improvement in their cyclically-adjusted budgetary balance.
The Commission observes that the internal market is still too fragmented and points out that after years of steady improvement several important indicators now suggest that integration has gone into reverse.
The value of manufacturing trade inside the EU shrank in 2002. Despite the euro, the convergence of prices across the EU has stalled. And the EU is now investing more in the rest of the world than the rest of the world is investing in the EU.
Mr Prodi called for the EU to set itself three priorities for the March summit: improving investment in networks and knowledge; strengthening the competitiveness of industry and services; and promoting the employment of older people. Those themes chimed in with remarks made by government ministers.
Ms Harney told the European Parliament committees yesterday that the EU had to stem the haemorrhaging of science and technology graduates out of the EU.
Pointing out that 400,000 EU science graduates were working in the US, she said: "We produce more scientists and researchers than the US but too many of them move to the US to work." She said she believed that whatever the EU's future budget, a greater proportion should be spent on research and development.