Tomorrow's Economy

Gearing EU governance towards future growth

14 March 2013

The side-lining of Europe 2020 and its worrying consequences

Renaud Thillaye

The Eurozone crisis has siphoned the attention of EU leaders in recent years. Yet before the 2008 credit crunch and the ensuing sovereign debts crises, Europe’s economic models were already facing deep-seated challenges. Global competition, ageing populations, the rarefaction of energy, and the rise of broadband called for more resilient growth models based on innovation, the optimisation of resources and new forms of protection.

To this end, EU leaders launched the Europe 2020 Strategy in 2010. Ambitious investment, social and energy targets were endorsed. The embedding of Europe 2020 at the core of EU economic governance was supposed to improve political ownership and delivery.

However, as this new Policy Network research piece argues, this agenda is being side-lined once again. On the one hand, lessons from the relative failure of the Lisbon Strategy have not been drawn. The EU has only limited clout to propel reforms in member states. The responsibility of national governments for upgrading the socio-economic model should not delude anyone.

On the other hand, the EU long-term agenda collides with the stability rationale prevailing in the Eurozone. An analysis of ‘Annual Growth Surveys’ and ‘Country Specific Recommendations’, and interviews with policymakers in Brussels, confirm that the European Semester has so far prioritised fiscal and competitive adjustment.

With an average unemployment rate of 11% and a decline of household income in the majority of member states, the absence of more ambitious social and productive investment policies could have dramatic consequences.

Author Renaud Thillaye concludes that the Europe 2020 Strategy should not be considered as a ‘good-weather strategy’ only.  The EU has to find a sense of purpose once again.

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