Saturday, 2 October 2004

German finance minister: EU economy cannot catch US by 2010


Campaigners have reacted furiously to a statement by German finance minister Hans Eichel saying that the EU will not succeed in its aim to become the “most competitive economy in the world by 2010″ and catch up with the US.

Speaking in the German Parliament yesterday (7 September), Mr Eichel declared, “We will not manage to make Europe the world’s most competitive area by 2010 but the objective is right … All countries in the EU must contribute to it and so must we”.

Although most economists and many politicians privately believe that the EU will fail in the so-called Lisbon aim, it is the first time a senior European figure has expressed major doubts in public.

And Mr Eichel’s comments echo those of incoming Commission President José Manuel DurĂ£o Barroso who recently said, “It was a very ambitious goal and many consider it too ambitious”.

Outrageous

But the Lisbon Council, a Brussels-based organisation campaigning for economic reform in the EU, reacted furiously to Mr Eichel’s comments.

Executive Director Ann Mettler fumed, “Mr. Eichel’s comments are outrageous and destructive. What does the Finance Minister of the largest European economy want to achieve with such a self-defeatist attitude”?

“Rather than questioning a deadline five years from now, he should get busy putting Germany’s economic house in order. That, after all, is the biggest drain on the European economy and one of the key reasons why we are not on track in meeting the Lisbon goals”.

Poor progress

Ms Mettler is right to say that the EU is not on track in meeting the Lisbon goals.

Since EU leaders vowed in 2000 to make the EU “the most competitive, knowledge-based economy in the world by 2010″, the Union has actually gone backwards on many key measures of productivity whilst the US has forged ahead.

The Dutch Presidency has made the Lisbon agenda a central plank of their economic work programme and will in November receive a report from former Dutch Prime Minister Wim Kok suggesting ways to breathe some life back into the process.

This will form the basis for a “mid-term review” during the Luxembourg Presidency – beginning in January 2005.

By Richard Carter

This article first appeared on http://euobserver.com