EU enters decisive period for economic plan

Memory of the EU's current economic plan - the Lisbon Strategy, due to expire in 2010 - is also likely to influence EU leaders as they prepare to discuss its successor at a number of European summits over the next six months under the Spanish EU presidency.

The Lisbon Strategy's aim to make the union "the most competitive knowledge-based economy in the world" by 2010 is widely acknowledged to have failed, while its two headline targets of 70 percent employment and research and development spending equivalent to 3 percent of GDP are both set to be missed, say experts.

Yet the aims of the 'EU 2020', as the new plan has become known so far, may not differ radically from aspirations in the outgoing decade, although there is likely to be a considerably stronger emphasis on 'green growth'.

A commission consultation document launched in November lists three broad themes: 'Creating value by basing growth on knowledge', 'Empowering people in inclusive societies', and 'Creating a competitive, connected and greener economy'.

Achieving greater growth and higher employment levels through improved education, tailored towards industry needs, and greater levels of research and innovation is unlikely to face major opposition from member states, although NGOs and MEPs are keen to see real steps towards securing social inclusiveness.

Some ideas such as a relaxation of EU competition policy to enable the necessary government investment in innovation projects, an idea expressed by Will Hutton, vice-chairman of the Work Foundation think tank in the UK, in a recent interview with EUobserver, may prove too controversial.

Enforcement

The real area for potential disagreement is likely to surround the definition of targets to ensure the plan's broad themes are actually achieved, and in particular the need for mechanisms to enforce these targets.

With the EU having little competence in the relevant areas of education, social policy, employment, the Lisbon Strategy relied on peer pressure among states to ensure national governments met their agreed goals.

The failure of this system has led several, including Spanish foreign minister Miguel Ángel Moratinos, to call for binding mechanisms to ensure individual member states keep up their end of the agreement.

"We need to have many more binding elements," said Mr Moratinos in Brussels in December, adding that there should be "consequences" for those states that fail to reach targets.

Mr Moratinos did not go into the details of these "consequences", but commission officials say their formal submission to EU leaders, scheduled to meet in February, may seek to link targets under the new economic plan with the region's Stability and Growth Pact.

Member states in breach of the pact's rules on permitted debt and deficit levels are issued with reports on how to rectify the situation by the commission, with the possibility of fines for non-compliance.

Officials suggest that the commission may try to co-ordinate the release of these reports with 'scoreboards' on member state performance in reaching EU 2020 targets, in a bid to create a greater link between the two, although wary governments could easily reject the idea.

Timetable

Launched in November, the commission's consultation period which invites interested parties to give their views on the plan's direction, is due to end on 15 January.

The commission is then expected to come forward with proposals before a specially convened informal European summit of EU leaders on economic affairs in February, to be chaired by the European Council's permanent president Herman Van Rompuy.

Leaders are then likely to agree the general focus of the plan at the regular March European summit the following month. The commission is then scheduled to come forward with broad economic policy guidelines for adoption by finance ministers at one of their regular meetings in April-June, with the final rubberstamping expected by leaders at the June European Council.

Officials say the exact timetable of when the various components will be agreed is still vague however, while several MEPs and NGOs have criticised the timeframe as being too short, pointing out that the Lisbon Strategy runs until the end of 2010. The commission counters that the current circumstances mean there is no time to waste.