T h e L i s b o n R e v i e w 2 0 0 8 : M e a s u r i n g E u r o p e ’ s P r o g r e s s i n R e f o r m
The Lisbon Review 2008:Measuring Europe’s Progress in Reform
By Jennifer Blanke and Thierry Geiger, World Economic Forum
The present international financial crisis,coupled withrising food and oil prices,and the related economicslowdown in the world’s leading economies,is confrontingpolicy-makers with significant economic managementchallenges.And despite initial discussions of economicdecoupling,Europe’s economies have not been sparedfrom the effects of a crisis that mainly originated in theUS.As a result,the overall economic outlook for theregion is now less favourable than just a year ago.
Thevolatility in financial markets underscores the importanceof a competitiveness-supporting economic environment tobetter enable national economies to weather these types of shocks and to ensure solid economic performance goinginto the future.At the March 2000 European Council in Lisbon,Portugal,Europe’s heads of state and government set a 10-year timeline to make the European Union “the mostcompetitive and dynamic knowledge-based economy inthe world,capable of sustainable economic growth withmore and better jobs and greater social cohesion.”Thepolicy agenda aimed at reaching this goal became knownas the Lisbon Strategy of economic and structural reforms.More specifically,the objective of the Lisbon Strategy wasto improve Europe’s productivity and competitivenessthrough various policy initiatives,building on a number of goals that had been formulated years before.Theseincluded the creation of an information society for all,establishing a European area of research and development,developing a business-friendly start-up environment,completing the single market,establishing efficient andintegrated financial markets,building a knowledge society,ensuring more and better jobs for Europe,modernizingsocial protection,promoting social inclusion andenhancing sustainable development.Box 1 includes someestimates of the benefits of the Lisbon Strategy.This review is the fourth edition of a biennial study carriedout by the Global Competitiveness Network of the WorldEconomic Forum,which is aimed at gauging Europe’sprogress towards these goals.The aim of this study isthreefold.First,it compares the performance of individualEU members to provide a sense of which countries arepresently making the most progress and which are laggingbehind.It also takes stock of the change in relativeperformances of individual countries since the last
in 2006 to gauge the countries’relative progress.Second,the study assesses the extent to which the 27 EUmember countries are competitive vis-à-vis aninternational standard,using the United States and theaverage performance of five of the most competitiveeconomies in East Asia – Hong Kong,Japan,Korea,Singapore and Taiwan,China – as internationalbenchmarks.This provides a comparison with economiesthat are widely seen as among the world’s mostcompetitive,particularly with regard to market efficiency,entrepreneurship and technological progress,all criticalelements of the Lisbon Strategy.Third,the study assesses the economic competitiveness of the EU candidates and potential candidate countries,basedon the Lisbon criteria,and provides a sense of thechallenges currently facing them.In addition,we take anenlarged approach,going beyond the likely futureaccession countries to encompass the Commonwealth of Independent States (CIS),also including those fromCentral Asia.Our reason for doing so is that economicdevelopment in these countries is of critical importancefor the stability of the EU’s greater economicneighbourhood,both on domestic economic and trade-related grounds as well as for the security of the regiongoing forward.What differentiates this study from those that have beenregularly carried out by the EU or other organizations,such as the Centre for European Policy Reform,
assessingthe EU reform process is that it is based in large part onthe World Economic Forum’s Executive Opinion Survey(EOS).This survey is carried out among CEOs and topexecutives in each of the countries under analysis.Thismeans that the results can be interpreted in large part asthe business community’s perspective on these countries’relative performances in meeting the Lisbon goals.Sincebusiness leaders make many of the investment decisions intheir economies,their perceptions are clearly related to theprospects for economic development and competitiveness.
The Lisbon Review 2008 © 2008 World Economic Forum