31st Oct 2020

EU countries slip in global competitiveness ranks

European countries are slipping down the ranks in terms of global competitiveness, according to an independent study published on Thursday (6 May).

The World Competitiveness Yearbook - published by leading business school IMD in Switzerland - ranks 60 countries and regions according to 323 categories that contribute to a competitive economy.

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And the ranking makes disappointing reading for Europe. According to the report, the top six countries are the US, Singapore, Canada, Australia, Iceland and Hong Kong.

The top EU country - Denmark - comes in seventh.

Going backwards

What is especially significant is that EU countries appear to be going backwards.

Last year, Denmark was fifth, Finland was third and Luxembourg was second.

And the same appears to be true at the bottom of the league, where Italy, ranked as the least competitive of the "old" EU states, has slipped from 41st to 51st. Italy is considered less competitive than Russia, Jordan or the region of Sao Paolo in Brazil.

Even lower than Italy stands Poland (57th), which is ranked only above Indonesia, Argentina and Venezuela.

Overall, of the 20 EU countries surveyed, only four (Austria, Slovakia, Ireland and Sweden) had improved their position from the year before.

Portugal was in the same place, but the other 16 were overtaken.

And this report will undoubtedly cause ripples in Brussels where a high-level group is currently putting together proposals to invigorate the so-called "Lisbon strategy", which is the EU's ambitious goal to be the most competitive, knowledge-based economy in the world by 2010.

Problems getting worse

According to the report, the situation may get worse, rather than better, saying, "Europe is confronted with a declining demography and an ageing population, which is hurting its competitiveness".

And the IMD issues a warning: "With growth under 3 percent, European nations simply cannot afford to maintain their welfare systems at current levels. Reforms prove almost impossible to enforce or, at the best, are adopted too slowly, as we are seeing in France, Germany and Italy".

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MEPs are requesting additional, new funding of €39bn for 15 EU programs. The German presidency argues that budget ceilings, agreed by EU leaders at a marathon summit in July, will be impossible to change without a new leaders' meeting.

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