The Lisbon Strategy represented an ambitious ten-year reform program which searched for answers to global challenges. These were the advancement of the US and Japan in a ‘new’ knowledge based economy and their domination in the field of information and communication technology. The new program, Europe 2020 is more about than just overcoming the crisis from which economies are now gradually recovering. It is also about addressing the drawbacks of our growth model and creating the conditions for a smart, sustainable and inclusive growth.
The Lisbon Strategy – an ambitious program with unsuccessful results
March 2000, Lisbon: the European Council is setting out a new plan for next ten years of rapid and comprehensive economy development for the European Union that is so-called The Lisbon Strategy. Its aim is to make the EU the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion through the formulation of policy initiatives that were to be implemented by all Member States.
However, despite achievements in some areas, the original Lisbon Strategy gradually developed into an overly complex agenda with multiple goals, actions and unclear division of responsibilities, while the results were weaker than expected. Implemented reforms helpedto raise the euro zone potential GDP growth rate by 0.2%. Noticeable growth in employment was a result of creation of nearly 6.5 million new jobs. In the field of public finances, average EU budget deficits have been cut from 2.5% of GDP in 2005 to 1.1% in 2007. However, most of these impressive results have been destroyed by the financial crisis which hit in 2008 and 2009 pushing Europe to the worst situation since the 1930s. In 2009 alone in the EU, GDP fell by 4%. In the period between March 2008 and December 2009,7 million people lost their jobs while industrial production fell by about 20%. An ordinary citizen can wonder how it was possible with such fundamental improvement program prepared by economists and specialists.
Retrospectively, the failure of this program must be accepted. Most of the objectives stated in Lisbon did not come into practice because the strategy was not focused enough on critical elements which played a key role in the origin of the financial crisis. Final report concluded that the gap between the best and worst performing countries is wider in 2010 than it was in 2000. Weak organization caused more problems than there were at the beginning. The soft law nature of the Lisbon reforms were relatively easy to carry out in countries where they are not crucial, while their implementation is difficult in countries where they are indispensable.
Official comments on failure:
Europe 2020 – new strength for an old agenda
The need for a post-2010 Lisbon strategy was officially expressed for the first time at the European Council summit held in March 2008. It stated that Europe 2020 should focus on key policy areas where collaboration between the EU and Member States could bring the best results. The thematic priorities of the new strategy are: emphasized need for policy and governance synchronization as a key factor in making a successful exit from the financial crisis, creating value by basing growth on knowledge, empowering people in inclusive societies and creating a competitive, connected and greener economy. Five headline targets have been set for the EU to achieve them by the end of 2020. The objectives of the strategy are also supported by seven ‘flagship initiatives’ providing a framework through which the EU and national authorities mutually reinforce their efforts in areas supporting the Europe 2020 priorities. One of these 7flagship initiatives is program Innovation Union that recently organized European Innovation Convention 2014 that our editorial board had chance to participate in and report for you. Other areas that are significant to improve for the better future in Europe are:
deepening single market – simplifying company law, allowing entrepreneurs to restart after failed businesses. What is more, individual consumers should be able to buy goods and services from other EU countries with greater ease and confidence, in particular on-line.
Investing in growth – a regulatory environment that ensures effective, secure financial markets, innovative instruments to finance the necessary investment – including public-private partnerships.
External policy instruments –external aspects of various internal policies (energy, transport, agriculture, R&D), trade and international macroeconomic policy coordination, assertive and effectiveparticipation in international fora such as the G20, to shape the future global economic order.
The Europe 2020 strategy is implemented and monitored in the context of the European Semester, the yearly cycle of coordination of economic and budgetary policies. It seems to be a positive change to cover and improve, at first place, the key factors that will influence other sectors in near future.