2020 vision

LESSONS FROM LISBON

The Lisbon Agenda, as revised by EU leaders in 2005, had two ‘headline' targets: that the EU should invest 3% of its gross domestic product in research and development, and that it should have an employment rate of 70%. Neither of these has been achieved. Research and development investment remained stuck at around 1.85% throughout most of the strategy's period of operation, rising to 1.90% in 2008 (the latest available figures). This means that Europe's commitment to research remains behind the US (2.67%), Japan (3.44%) and South Korea (3.21%). Employment levels rose in the years leading up to the financial crisis, but not by enough to reach the target. The EU's total employment rate was 65.9% in 2008, compared to 62.2% in 2000. Much of what was achieved will be reversed by the economic crisis – the European Commission estimates that employment fell 2.3% in 2009 compared to 2008, and that a further fall of 1.3% can be expected this year. The Lisbon Agenda, however, contained far more than the headline targets – it was a sophisticated package of policy goals covering reforms to education and training, the slashing of administrative burdens placed on businesses, infrastructure investments, and structural reforms to reduce budget deficits and boost economic growth. The most recent monitoring reports published by the Commission suggest that, although significant progress was made, it was patchy, varying between policy initiatives and member states. A report published by the Commission in January 2009 said that progress in reducing burdens on businesses had been “slow”, and that political support for it “is missing in some member states”. But it said that some successes had been achieved, including a drop in the average number of days necessary to start a company in the EU, from 96 in 2004 to 35 in 2008. The Commission's most recent set of country- specific reports, published in January last year, revealed that a number of member states were not showing sufficient urgency in their structural reforms, including Greece (which suffered a financial emergency in December when credit rating agencies expressed increasing doubts about the country's ability to pay its debts), Bulgaria, Italy, Lithuania, Hungary, Romania and Latvia. Nevertheless, significant reforms were achieved: for example most member states have overhauled their pension systems since the start of the Lisbon Agenda.
Commission officials argue that Lisbon Agenda reforms played a significant part in the drop in unemployment that occurred in the years immediately prior to the financial crisis. Unemployment in the EU fell to 6.7% in the period February-April 2008, its lowest level for decades.