The European Commission on Tuesday warned member states of reform fatigue in implementing a key European Union (EU) strategy for growth and jobs though they were making progress.
Two years after it was relaunched in 2005, the Lisbon strategy for growth and jobs is contributing to the recent much improved performance of the EU economy, the EU's executive arm said in its strategic report on economic reform across Europe.
However, the report found some member states had responded more robustly than others and some signs of "reform fatigue" had become apparent over the last twelve months.
According to the report, most EU member states have now implemented the main economic reforms which they had pledged to bring in between 2005 and 2007, the first three-year cycle of the Lisbon strategy.
Only three countries -- Hungary, Poland and Slovakia -- were judged to have achieved just "limited" progress in that respect.
Though all member states have now set a national R&D investment target, the proportion of gross domestic product (GDP) spent on R&D in the EU has recently failed to keep up with stronger economic growth rates and decreased from 2.0 percent of GDP to 1.85 percent in 2006, with large differences between member states.
R&D spending has been taken as an important aspect of the relaunched Lisbon strategy to stimulate economic growth. Among its two EU-level top targets, the strategy called for investment of 3 percent of Europe's GDP in R&D by 2010, which seems more difficult to be achieved.
Europe is still lagging behind other leading economies in investment in information and communication technologies and in their use to enhance productivity, the report said.
As to the other target, the Lisbon strategy set the same deadline for the employment rate to be raised to 70 percent.
Though significant improvement has been observed on the EU labor market, the target is still far from reach, if not possible.
According to the commission, almost 6.5 million new jobs have been created in the last two years. Another 5 million jobs are expected to be created up to 2009. Unemployment is expected to fall to under 7 percent, the lowest since the mid-1980s.
But many labor markets in member states remain segmented, with well-protected insiders and more precarious outsiders on contracts with uncertain prospects. Educational systems are not doing enough to give young people the skills they and employers need.
Worker mobility remains still relatively low. Only 2 percent of working age citizens live and work in another member state. In some member states workers still face significant barriers when changing jobs.
Thanks to the Lisbon strategy, EU budget deficits have been significantly reduced, from 2.5 percent of GDP in 2005 to a forecast 1.1 percent in 2007. EU public debt has declined from 62.7 percent in 2005 to just below 60 percent in 2007.
However, the commission said the opportunity to use the relatively strong growth conditions to reduce structural deficits further has not been fully seized, especially in the euro zone.
The reports said opening up network industries and services to competition has been slow and important obstacles to market entry remain. Some member states lag behind in the implementation of internal market rules.
Although there have been important steps forward in implementing the EU's better regulation agenda, some member states need to do more to reduce administrative burdens and improve the business environments.
The Lisbon strategy was initially adopted by EU member states in 2000 in Lisbon, capital of Portugal.
Previously aimed at making the EU "the most dynamic and competitive knowledge-based economy in the world" by 2010, the bold strategy was later watered down and was relaunched in 2005 with a clear focus on growth and jobs.
Source: Xinhua
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