Getting from Lisbon to Warsaw

GETTING FROM LISBON TO WARSAW Why structural economic reform matters to EU candidate countries. And vice versa. The goal of joining the European Union is now tantalizingly close for many central and Eastern countries. The bigger question is what kind of EU are they joining? For much of the past decade, policy-makers and business leaders in the candidate countries have assumed accession is a sure-fire path to economic prosperity. In fact, the EU has under-performed badly for the last decade or so. GDP per head in the US, for example, is now 50% higher than the EU average. To address this problem, EU leaders, meeting in the Portuguese capital in March 2000, agreed an ambitious ten year programme of economic reform. The goal of the ‘Lisbon agenda’ was to make Europe: “the most competitive and dynamic knowledge-based economy in the world” by 2010. This would require raising Europe’s output by around 40% and creating 20 million new jobs. EU leaders agreed to meet each spring in order to maintain momentum. The forthcoming European Council meeting in Barcelona on March 15/16 – two years after Lisbon – will therefore be a defining moment. Even last summer, British Prime Minster Tony Blair was already describing the Barcelona summit, as “make or break” for the EU’s economic reform agenda. Progress on delivering technological innovation, market liberalisation, enterprise and social inclusion is badly needed. In drawing up the Lisbon agenda, the interests of candidate countries, who will likely join half way through the ten-year programme, were hardly considered. Belatedly recognising the problem, the EU has pledged to formally include candidates in Lisbon-related discussions from 2003, even before they become full members of the Union. The candidate country Heads of State will therefore sit down with the EU-15 at Barcelona to discuss economic reform. These discussions should not be seen as additional hurdle for candidates to cross before they can join the EU. It neither replaces nor adds to the acquis communautaire. But the Lisbon agenda gives candidates clear targets to aim for, when developing their own policies. It is essential they are not left behind in the economic transformation of Europe – otherwise the political ‘iron curtain’ will be replaced by an economic one. In fact, some of the candidates on some of the Lisbon measures are at – or beyond – best practice in the EU-15. There are some compelling reasons why the enlargement of the EU should be good news for the Lisbon strategy: