23rd Nov 2017

Prodi: 'radical change' needed for EU to catch US

Commission President Romano Prodi on Tuesday (25 May) called for a "radical change" in EU economic policy if it is to succeed in its ambitious goal to overhaul the US and become the "most competitive economy in the world by 2010" - its so-called Lisbon strategy.

Speaking at a meeting of the European Economic and Social Committee, Mr Prodi said that the process is undergoing "great difficulties" and declared, "if we want the Lisbon strategy to be a success, we need to radically change European economic policy".

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  • The US is still far ahead of the EU economically (Photo: EUobserver)

Echoing his sentiments, competition commissioner Mario Monti asked, "how can we seriously try to become the most competitive economy in the world if we do not put our money where our mouths are"?

He called for the Lisbon goals to be given a higher priority in the EU budgetary period from 2007 - 2013, known in Brussels jargon as the "financial perspectives".

"We need … to use an ugly phrase … to ‘Lisbonise’ the financial perspectives", said Mr Monti.

Strong views on Europe’s economy

Also at the meeting were representatives from the social partners - business groups and trades unions - who had strong words for the commissioners.

Giacomo Regaldo, representing businesses and employers, said that "the budgeters do not have the confidence of the business world or of consumers".

He called into question the spending proposed by the European Commission for the EU budgetary period 2007-2013, asking whether it was sufficient to boost slow growth in Europe.

And his colleague from the other side of the divide - representing trades unions and employees - was scarcely less critical.

Referring to the Lisbon strategy, Mario Sepi said, "it’s been five years now. If we don’t get going now, it will never get off the ground".

Long road to Lisbon

The beleaguered Lisbon strategy was established in 2000 - at the height of the dot-com boom - but by common consent among politicians, economists, business leaders and trades unions, has been little short of a total failure.

Growth rates in the US have consistently outstripped those in Europe and the EU falls behind America on almost every measure of competitiveness.

The blame for the failure is mainly laid at the door of member states, whose leaders make sweeping and ambitious targets but have frequently failed to deliver on their promises.

A "high-level group", chaired by former Dutch prime minister Wim Kok, has been established to look into the reasons for the failure.

The group will report to EU heads of state and government at their next meeting in June.

Commission warns Italy over high debt level

The Italian government must demonstrate it is making an effort, or the EU will consider launching a procedure. France and Romania are also under scrutiny.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

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