To become “the most competitive and knowledge based economy by 2010” was the aim of the Lisbon Agenda set in the year 2000; an economic strategy designed to be implemented across Europe in order to address the challenges posed by an increasing globalised and evolving economy. (Rodrigues, 2009) It was launched as an intention to find a solution to the European Union’s stagnating growth rate which had been ‘structurally lower than that of its main economic partners’ particularly when in comparison to the United States through a set of new policy initiatives. (European Commission, 2010) The ambitious ten year reform programme included aims which targeted promoting the integration of social and economic policy, completing the internal market and developing an active employment policy.
In March 2010, the vision for Europe 2020 strategy (Europe 2020) was commissioned as a successor to the Lisbon Strategy. This strategy, another decade long reform plan aims to be a continuation and replacement of the previous Lisbon Strategy with an increasing focus and emphasis on boosting economic growth and employment across the union through the aim for “smart, sustainable and inclusive growth”. This emphasis on economic growth and employment was fuelled by the recent global financial crisis which dramatically impacted the EU’s economy in which it saw economic indicators returning to pre 1990s levels. (Samardzija & Butkovic, 2010)
Targeting smart, sustainable and inclusive growth as priorities is what the commission believes will offer a vision towards a social market economy built for the 21st century. (European Commission, 2010) . Five EU targets were set, grouped into Employment, Research & Development, Climate Change and Energy Sustainability, Education and Fighting Poverty and Social Exclusion. These five goals all aim to foster and achieve the overall goal of promoting smart, sustainable and inclusive growth, guiding policymaking in the EU and its member states. (European Commission, 2013)
Today, three years following the date set for when the original goals of the ambitious Lisbon Strategy should have achieved, Europe has still not achieved status as the world’s most competitive and knowledge based economy. This essay intends to look upon the Lisbon Strategy and the evolvement to the Europe 2020 strategy by comparing and contrasting their individual aims, objectives and structural through the use of European Commission data, journals and other academic literature. This essay will also be asking what led to the failure of the Lisbon Strategy and whether such factors are still effecting the successful implementation of the Europe 2020 strategy, and questioning if this latest strategy will again face the same unsuccessful conclusion as its predecessor. (Nello, 2012)
Both the Lisbon Strategy and subsequently Europe 2020 were commissioned in order to improve the competitive strength of the European Union from growing competition of developed economies such as the United States and the increasing rise of the BRIC nations representing Brazil Russia India and China as well as an increasingly interrelated and global marketplace. Strong similarities can therefore be found in the foundations of the two strategies in their policies towards meeting this central goal of encouraging and reinforcing economic sustainability and growth. Despite the external conditions being different at the time of implementation; the policies and initiatives introduced still work towards the central overall strategy of competitiveness The need for the Lisbon Strategy of 2000, was the stagnation of growth being seen across the European Union in comparison to the United States, who in the decade previous saw high rates of employment and growth. In comparison Europe 2020 launched in March 2010, two years following the start of the global financial and economic crisis which severely hampered the European Union. (Colak & Ege, 2011)
An emphasis on Employment and Economic growth policies was first introduced during the Lisbon Strategy’s midterm review of 2005. The emphasis on growth from the target for a ‘Knowledge Based Economy’ in the Lisbon Strategy can be seen to have been continued and reflect in Europe 2020 as the target for ‘Smart Growth’ that forms as a key goal. . The commission highlights the positive aspects and strengths of the Lisbon Strategy to be the focus on growth and job creation. (Europe Commission, 2013) This continuation shows the need for such a drive and an acceptance that such an emphasis is required, as reiterated by the commission who said that the strategy helped to weather the economic and financial crisis (Samardzija & Butkovic, 2010)
The strongest and most influential contrast between the strategies when comparing the two is in the economic environment in which the Lisbon Strategy and Europe 2020 were designed and introduced. During the design and implementation of Europe 2020 and still today, the EU and US are still suffering from the consequences of the crisis whilst increasing seeing competition from the BRIC nations and developed global competitors increasing. This is a strong contrast to the economy of the EU during the Lisbon Strategy, which was designed solely to encourage growth that stagnated when comparing to the United States. These economic conditions, focusing not just on the EU context but on that of the global economy can be seen to have impacted and subsequently been reflected in the strategy and change of direction from EU2020’s predecessor, the Lisbon Strategy. (Samardzija & Butkovic, 2010) said the “design of the new strategy was heavily influenced by …the compounded economic policy challenges arising from the crisis”. One such impact can be seen in the policies and strategy is noticeable change in the ambitiousness of the targets that have been set out. Lisbon Strategy included ambitious targets and objectives covering economic, environmental and global issues, most notably ‘to become the most competitive and knowledge based economy by 2010’. Critics argued that policies launched were ‘too ambitious, and an ‘overloaded agenda’ most notably by Kok in his report which led to the Lisbon Strategies’ midterm review of 2005. (Kok, 2004) Many critics believe that over ambitious and challenging targets were one of the reasons for the limited Lisbon Strategy success, and agreed that a successor strategy should ‘involve more realistic targets, consistent with future growth prospects’. (Colak & Ege, 2011) This is expressed in the Europe 2020 strategy, through the less ambitious, in comparison to Lisbon Strategies, overall target of ‘smart, specific, inclusive growth’ and an increased focus in how the commission intends to achieve this through the use of five specific and measurable headline targets, interrelated and critical to overall success. (European Commission, 2012)
One of the greatest criticisms of the Lisbon Strategy was the lack of enforcement and governance by the commission themselves when implementing the strategy across (European Commission, 2012)nations. Critics claimed this lack of enforcement, which does not hold legal precedence, failed to encourage member states and gain support towards the working together to achieve the goals and aims set out by the strategy. This led to a lack of coordination of the overall aims of the EU economic strategy and this lack of governance and monitoring is what many cause as one of the detrimental internal factors that led to the failure of limited success of the Lisbon strategy. “To succeed and enforce a prosperous future for European citizens, this strategy needs to be fully endorsed and implemented at national level” as described by member state Croatia’s head of delegation of the EU. (Samardzija & Butkovic, 2010) The Commission realised this need and in drawing their strategy, described that “more focus, clear goals and transparent framework was needed” in order to achieve transformation change. This need is reflected in the contrasts and changes made in the design of latest strategy.
Europe 2020 learnt from these weaknesses and incorporated new governance initiatives which introduced tighter economic control as well as a new partnership approach, towards working together. (Pasimeni, 2013) (European Commission, 2012) In launching a stronger stance on governance and in an increased regular transparent monitoring of Europe 2020, a new country surveillance method was introduced in order to rectify this weakness of coordination in the Lisbon Strategy. “The contribution at national and regional level and of social partners needs to be enhanced”. (EU Blue Commission) This level of country surveillance through individual member reporting was designed to help the commission support the choices the member states make in relation to fiscal and macroeconomic issues. In doing so, this helps ensure an integrated approach to the designing of policies and their implementation in line with the main focus of the commission, the achievement of the Europe 2020 flagship goals and initiatives.
In Europe 2020, National Reform programmes now lie at the heart of achieving the goals of Smart, Sustainable and Inclusive Growth. As part of this National Reform programme, member states are given the ability to tailor policies to nations, defining their own national targets that help to support the Europe 2020 headline targets, such as 3% of EU GDP to be reinvested in Research and Development. Despite this initiative first being introduced midway through the Lisbon Strategy following the midterm review, it was not integrated from the beginning of the strategy and did not form the central governance it does in the latest. The new National Reform Programmes present in Europe 2020 form a new combined effort between the commission and member where the partnership between the two to work towards the overall goals of achieving smart, sustainable and inclusive growth. This attempts to further fix one of the weaknesses of the Lisbon Strategy, where a ‘one size fits all’ approach was criticised for a harmonisation of goals across member states with distinguishing characteristics and diverse economic statuses.
The Lisbon Strategy was set to strengthen the European Union, economically, socially, ecologically though a variety of a reform measures. These structural reform measures were in the joint objectives set at the EU level that were passed down across member states. Unlike the Europe 2020 strategy, such objectives were not tailored at the individual national level. This turned out to be problematic for those countries that had either already surpassed such target with member states of a strong economic state, such as the Nordic member states and with those that were still far from reaching them, including Greece and Italy (Aubock, et al., 2011)
Although at first this did not cause many issues, the problem became rife as the European Union began to expand its membership. Whereas the Lisbon Strategy was originally intended for a homogeneous group of member states usually characterised with a high-per capita income, following the expansion it no longer represented this and became a far more heterogeneous group.
The European Union began with only 15 members however ended with 27 members by the end of the Lisbon strategy, this change and its subsequent impact critics claim was not sufficiently considered in the strategies design. (Aubock, et al., 2011) Such heterogeneity can be seen in the variances between member states with high income levels to those with low levels. These examples of varying member states conditions and economies can be seen as a reason for the greater divergence in results amongst nations. (Aubock, et al., 2011)
When defining and looking at the Lisbon Strategy as a whole, it is difficult to analyse how successful it truly was due to the strong economic factors and institutional changes that it experienced during its ten year programme. In 2005 a mid-term review was held after critics described the strategy as ‘failing’ with the most notable being from the Kok Report of 2004, by the then Dutch prime minister who criticised the strategy for its “missed objectives and failed promises”. (Kok, 2004) Kok highlighted four main reasons for the poor impact of the strategy on performance being, poor coordination, an overloaded agenda, conflicting priorities and a lack of political action. (Nello, 2012) Recommendations presented in Kok’s report were accepted, and the following Kok’s most criticism of an overloaded agenda previously, a renewed strategy was re-launched with a greater focus on growth and jobs as long term goals. This new refocus was introduced along with four main objectives of knowledge and innovation, improved implementation, making internal markets work better and more and better jobs. However even following such changes it was considered by many critics, including (Nello, 2012) and (Pasimeni, 2013) that the Lisbon Agenda failed to overcome these issues.
As previously mentioned, the increase in member states and the variety of members the strategy now holds was not considered during design as well as the launch of the single currency. The most influential external factor to have influenced the Lisbon Strategy was the global financial crisis of 2008, which as (Aubock, et al., 2011) describes has ‘overshadowed’ any progress and accomplishments that were made as a result of the strategy and ‘wiped out recent progress’ by the commission in 2010 (EU Blue Writing). Equally this is reflected by the commission with quantifiable statistics where the EU saw GDP fall by 4% in 2009 alone, industrial productive drop to pre1990s levels and over 10% of the active population unemployed. (Europe Commission, 2013)
Despite these statistics, a success and a lasting legacy of the of the Lisbon Strategy can be seen to be a growing convergence and acceptance from member states of the importance of one unified EU strategy, and working together as one European Union. (Aubock, et al., 2011) This acceptance saw more cooperation from member states, particularly following the negative impact of the global financial crisis where there is now acknowledgement from the majority of members that a Lisbon-type strategy represents ‘a useful tool for implementing future social and economic reforms and obtaining a greater level of policy convergence’ and is needed to remain competitive on the global stage. (Rodrigues, 2009) (Samardzija & Butkovic, 2010).
Like its predecessor, Europe 2020 aims to increase the union’s competitiveness amongst global competitors. As experienced when the Lisbon Strategy was announced, doubts have been raised by critics as to how successful this strategy will really be with critics claiming that detrimental factors that were present in its predecessors design can once again be seen in Europe 2020.
One such issue that (Erixon, 2010) describes that despite reforms made to country surveillance and monitoring initiatives, the strategy does not go far enough to distinguish between member states. His belief that one central policy and a harmonisation of goals, targets and policies aimed to fit the entire European Union and such a mentality can actually damage economic growth. This is because whilst it may be true for some sectors or growth strategies, it can be different for others. Highlighting some of the key divergences and one such example between member states is where one industry can be experiencing growth in one member state whilst declining in another, with the example of the industrial sector growing in Germany and declining in the United Kingdom, with more recent examples being the increasing austerity measures in Greece. If the same growth strategy is to be given to both members, it would be best suited and therefore better effective for one rather than the other even with a level of national level changes. These great divergences present both political and administrative difficulties when designing a strategy. (Samardzija & Butkovic, 2010)
Another criticism of the strategy is that once again much like the Lisbon Agenda, the strategy has seen “little more than lip service from the government of many EU member states” equally with the general public. (Nello, 2012) (Erixon, 2010) Even the commission in their 2010 report suggests that in order for the strategy to be successful “greater cooperation and support” is needed, however it can be seen that this has failed to materialize such as additional funds and budgets that were originally set aside failing to do so. It can be seen that governments are still occupied with the damaging effects of the financial crisis, to begin looking forward to the future and committing to such budgets. Such cash strapped governments need to be ensured that and convinced that this high priority for European growth and the Europe 2020 strategy is necessary for future economic progress and to ensure future competitiveness of the union. (Nello, 2012)
Ultimately how successful the Europe 2020 strategy, and whether the headline goals and an achievement of the smart, inclusive and sustainable growth goals remains to be seen. Despite its criticisms the Lisbon Strategy, it can be seen to have brought about an acceptance from member that an overall strategy is required regardless of whether goals were met, but has now become crucial in reinforcing closer economic integration between the nations. In looking and comparing the Europe 2020 with it’s predecessor the Lisbon Strategy there can be seen clear links between the two. It can be seen that the Commission has clearly identified the strengths and weaknesses of the Lisbon Strategy and tried to build upon and rectify these as part of Europe 2020. The latest strategy introduced new elements moving towards building a more cooperative and closely integrated group of members, despite the ever increasing number trying to fix the criticisms of the Lisbon Strategy of a ‘one size fits all’ policy. A structured and more stricter level of governance can be seen to be a step in the right direction, however critics still argue that there is not enough strict punishment for those member states that are poor performers or in which show a lack of commitment towards supporting the European mission as a whole. Overall success of this strategy will depend on the motivation and commitment of its members. Member states will either have to work together to support this strategy or face a continued level of ‘sluggish growth’ and a loss of competitive advantage, which may not just effect the short term but also the future.