At what Speed are EU-27 Member States Approaching the Lisbon Targets?

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Information about At what Speed are EU-27 Member States Approaching the Lisbon Targets?

Published on October 7, 2007

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Mr Valerio de Molli, The European House - Ambrosetti, Italy, Towards Lisbon 2.1, September 28, 2007, Ljubljana

Improving European integration and Competitiveness At what speed are EU-27 Member States approaching the Lisbon targets? Valerio De Molli Chairman, Observatory on Europe Managing Partner, The European House-Ambrosetti OBSERVATORY ON EUROPE 2007 Ljubljana, Sept. 28 th , 2007 Towards Lisbon 2.1

Mission of the Observatory on Europe … pragmatically contribute to the success of the European Union, providing its political and economic leaders, as well as its citizens, with high quality studies, analyses and proposals in order to help them build a stronger Europe, from economic, social and political standpoints. The Observatory on Europe aims to …

Fundamental Macro-Questions What is happening to the European Union? Is it true that EU countries are losing competitiveness vis-à-vis direct competitors (particularly the United States and Japan) and fast-growing economies? How fast is the integration process moving ahead? To what degree are Member States converging towards integration? What should the European Union (and its Member States) do in order to improve competitiveness and speed up the integration process? How to judge the enlargement process? Is it creating value for Europe? What main actions should be taken at EU level and at Member States levels? Are we really creating Europe?

What is happening to the European Union?

Is it true that EU countries are losing competitiveness vis-à-vis direct competitors (particularly the United States and Japan) and fast-growing economies?

How fast is the integration process moving ahead?

To what degree are Member States converging towards integration?

What should the European Union (and its Member States) do in order to improve competitiveness and speed up the integration process?

How to judge the enlargement process? Is it creating value for Europe?

What main actions should be taken at EU level and at Member States levels?

Observatory on Europe 2007 – Methodology: The Advisory Board (1/3) The European House - Ambrosetti ADVISORY BOARD and SCIENTIFIC COMMITTEE Scientific Committee + The European House - Ambrosetti Project Team June ’06 April ‘07 Final Report Analysis and Recommendations FORUM

Observatory on Europe 2007 – Methodology: The Advisory Board (2/3) Scientific Committee : Valerio De Molli Managing Partner, The European House - Ambrosetti Laurent Fabius Member of the French Parliament; Member of the French Government Commission on Foreign Affairs; Former Prime Minister, France Riccardo Illy President of the Assembly of European Regions; President of the Autonomous Region of Friuli Venezia Giulia Péter Medgyessy Former Prime Minister, Ambassador-at-large of the Republic of Hungary Loyola de Palacio * Chairwoman, EU Commission’s High Level Group on the Pan-European Mediterranean Transport Network; European Coordinator for the Lyon-Turin-Trieste-Ljubljana- Budapest Priority Transport Project; Former Vice-President of the European Commission * Until she passed away on December 13, 2006

Scientific Committee :

Valerio De Molli Managing Partner, The European House - Ambrosetti

Laurent Fabius Member of the French Parliament; Member of the French Government Commission on Foreign Affairs; Former Prime Minister, France

Riccardo Illy President of the Assembly of European Regions; President of the Autonomous Region of Friuli Venezia Giulia

Péter Medgyessy Former Prime Minister, Ambassador-at-large of the Republic of Hungary

Loyola de Palacio * Chairwoman, EU Commission’s High Level Group on the Pan-European Mediterranean Transport Network; European Coordinator for the Lyon-Turin-Trieste-Ljubljana- Budapest Priority Transport Project; Former Vice-President of the European Commission

Observatory on Europe 2007 – Methodology: The Advisory Board (3/3) Business Leaders : Ferdinando Beccalli-Falco President and CEO, GE International Sándor Csányi Chairman and CEO, OTP Bank Christian Miccoli CEO*, ING Direct Italy Thomas J. Moran President and CEO, Mutual of America Mike Todman President, Whirlpool International Stefano Venturi Vice President, Cisco Systems Inc ; CEO, Cisco Systems Italy * Until January, 2007

Business Leaders :

Ferdinando Beccalli-Falco President and CEO, GE International

Sándor Csányi Chairman and CEO, OTP Bank

Christian Miccoli CEO*, ING Direct Italy

Thomas J. Moran President and CEO, Mutual of America

Mike Todman President, Whirlpool International

Stefano Venturi Vice President, Cisco Systems Inc ; CEO, Cisco Systems Italy

Observatory on Europe 2007 - Quantitative Analysis SPEED PROFILE Ability to achieve the objectives set out by the EU CONVERGENCE PROFILE Ability to become a truly unified system ANALYSIS OF KPIs To measure the level of competitiveness of the EU as a whole and its MS GOAL #1 COMPETITIVENESS PROFILE Ability of EU Member States to compete worldwide To measure the degree of progress towards integration GOAL #2 MACRO-REGIONAL COMPARATIVE ANALYSIS Ability of the EU as a whole to compete worldwide

Ability to achieve the objectives set out by the EU

Ability to become a truly unified system

To measure the level of competitiveness of the EU as a whole and its MS

Ability of EU Member States to compete worldwide

To measure the degree of progress towards integration

Ability of the EU as a whole to compete worldwide

Observatory on Europe 2007 – Quantitative Analysis – Speed Profile SPEED PROFILE Ability to achieve the objectives set out by the EU ANALYSIS OF KPIs To measure the degree of progress towards integration GOAL #2 At what speed are EU-27 Member States approaching the Lisbon targets?

Ability to achieve the objectives set out by the EU

To measure the degree of progress towards integration

Speed Profile – Objective The EU Institutions have set out some quantifiable objectives to be reached in order to enhance the competitiveness level and the integration process This profile aims to estimate the speed at which each EU-27 Member State is approaching those institutionally fixed targets

The 10 Key Quantitative Targets Source: various EU Commission documents Total employment rate to reach 70% by 2010 Female employment rate to reach 60% by 2010 Employment rate for workers aged 55-64 to reach 50% by 2010 R&D spending to reach 3% of GDP by 2010 The number of early school leavers who do not continue with further education to be halved (i.e. to reach an EU average rate of 10%) by 2010 At least 85% of 22-year-olds to complete upper secondary-level of education by 2010 At least 12,5% of the adult working age population (25-64 age group) to participate in life-long learning Transposition rate of internal market directives to reach 98,5% Meet Kyoto targets by 2010 (Member States have individual targets) Meet 22% target for renewable electricity production on total (Member States have individual targets) EMPLOYMENT EDUCATION R&D INTERNAL MARKET ENVIRONMENT 2000-2005 2000-2005 2000-2005 2000-2005 2000-2006 2000-2005 2000-2005 2001-2006 2000-2004 2000-2004

Total employment rate to reach 70% by 2010

Female employment rate to reach 60% by 2010

Employment rate for workers aged 55-64 to reach 50% by 2010

R&D spending to reach 3% of GDP by 2010

The number of early school leavers who do not continue with further education to be halved (i.e. to reach an EU average rate of 10%) by 2010

At least 85% of 22-year-olds to complete upper secondary-level of education by 2010

At least 12,5% of the adult working age population (25-64 age group) to participate in life-long learning

Transposition rate of internal market directives to reach 98,5%

Meet Kyoto targets by 2010 (Member States have individual targets)

Meet 22% target for renewable electricity production on total (Member States have individual targets)

Methodological Notes In order to obtain a single indicator expressing the overall relative speed of each analysed country, the Advisory Board “Observatory on Europe” gave a score to the performance reached by each state in each KPI analysed . For each Key Quantitative Target: the best performer among the analysed countries received a score of 10 (max score) and the worst performer received a score of 0 each other country’s score varied between 0 and 10, according to its relative performance a score of 10 was also given to the countries that had already met their objectives – regardless of their relative performance in the time horizon considered. This aims to adequately reward their positive results The “scale” drove the scoring process and was calculated as follows: (max value – min value) / max score Having fixed the “scale”, the score of each State was estimated as follows: (Country value – min value) / scale

In order to obtain a single indicator expressing the overall relative speed of each analysed country, the Advisory Board “Observatory on Europe” gave a score to the performance reached by each state in each KPI analysed .

For each Key Quantitative Target:

the best performer among the analysed countries received a score of 10 (max score) and the worst performer received a score of 0

each other country’s score varied between 0 and 10, according to its relative performance

a score of 10 was also given to the countries that had already met their objectives – regardless of their relative performance in the time horizon considered. This aims to adequately reward their positive results

The “scale” drove the scoring process and was calculated as follows:

(max value – min value) / max score

Having fixed the “scale”, the score of each State was estimated as follows:

(Country value – min value) / scale

Countries’ Abbreviations EU-27 Member States Austria = AT Belgium = BE Bulgaria = BG Cyprus = CY Czech Republic = CZ Denmark= DK Estonia = EE France = FR Finland = FI Germany = DE Greece = EL Hungary = HU Ireland = IE Italy = IT Latvia = LV Lithuania = LT Malta = MT Luxembourg = LU Netherlands = NL Poland = PT Portugal = PT Romania = RO Slovakia = SK Slovenia = SI Spain = ES United Kingdom = UK Sweden = SE Turkey = TR

Employment – Total Employment Rate – Overview – Example 1. Total Employment Rate, 2000-2005 (%) (% of persons aged 15 to 64 in employment on the total population of the same age group) Source: The European House - Ambrosetti re-elaboration of Eurostat data, 2007 EU Target = 70% Δ 2000/2005 ES EU-27 average EU-27 2005 LV EE SI CY IE FI AT PT SE DK NL UK LT EL IT BG SK HU MT PL BE FR LU CZ DE RO

Employment – Total Employment Rate – Speed – Example 1. Total Employment Rate, 2000-2005 (%) Source: The European House - Ambrosetti re-elaboration of Eurostat data, 2007 (Speed towards the target: difference between the distance from the target in 2000 and 2005) Countries approaching the target between 2000 and 2005 Countries moving away from the target between 2000 and 2005 Score OK OK OK OK OK Countries already meeting the target 0.0 9.0 2.6 3.6 10.0 10.0 4.1 4.2 4.2 4.4 10.0 10.0 4.8 4.8 5.1 5.2 5.3 5.3 6.3 6.6 6.9 7.2 7.3 7.5 7.6 8.7 5.1 10.0

R&D – GERD – Overview – Example (% of GDP) Source: The European House – Ambrosetti re-elaboration of Eurostat data, 2007 EU Target = 3% Δ 2000 * /2005 * 2005 * (*) Italy, United Kingdom, Netherlands and Romania data: 2000-2004 Greece, Sweden data: 1999-2005 Malta data: 2002-2005 4. Research and Development Expenditure (GERD), 2000 * -2005 * EU-27 average EU-27 SE FI AT DK DE FR BE UK NL LU SI SK PL EL BG RO LV CY LT HU ES CZ IE IT PT EE MT

R&D – GERD – Speed – Example Source: The European House - Ambrosetti re-elaboration of Eurostat data, 2007 (Speed towards the target: difference between the distance from the target in 2000 and 2005) 4. Research and Development Expenditure (GERD), 2000 * -2005 * Countries approaching the target between 2000 and 2005 Countries moving away from the target between 2000 and 2005 OK OK Score 0.0 8.4 0.8 1.0 1.1 1.7 2.0 2.2 2.5 2.8 2.8 2.9 3.4 3.5 3.9 4.1 5.1 10.0 5.6 5.7 5.8 6.3 6.3 6.4 10.0 8.3 3.9 10.0 OK Countries already meeting the target

Education – Attainment Level – Overview – Example 6. Total Youth Education Attainment Level, 2000-2005 (%) (% of the population aged 20 to 24 having completed at least upper secondary education) EU Target = 85% Δ 2000/2005 2005 EU-27 average EU-27 LT SI PL CZ SK FI DE ES LU EL IE SE SK HU FR EE LV DK IT NL BG RO UK CY BE PT MT Source: The European House - Ambrosetti re-elaboration of Eurostat data, 2007

Education – Attainment Level – Speed – Example Source: The European House - Ambrosetti re-elaboration of Eurostat data, 2007 (Speed towards the target: difference between the distance from the target in 2000 and 2005) 6. Total Youth Education Attainment Level, 2000-2005 Countries approaching the target between 2000 and 2005 Countries moving away from the target between 2000 and 2005 OK OK OK OK OK OK OK OK Score 0.0 10.0 1.1 1.1 1.7 10.0 3.3 3.3 10.0 3.4 10.0 3.8 3.9 4.0 4.1 10.0 10.0 10.0 10.0 5.1 5.2 5.3 5.5 5.9 6.0 6.4 4.2 10.0 OK Countries already meeting the target

Internal Market – Transposition Rate – Overview – Example 8. Transposition Deficit of Internal Market Directives April 2001 (EU-15) or June 2004 (EU-10) – June 2006 Δ 2001 or 2004/2006 EU Target = 1.5% (2.2; -38.2) MT 2006 EU-25 average EU-27 CZ LV CY SK HU EE SI LT SE FI ES DE FR IE BE NL UK AT PL DK PT EL LU IT Source: The European House - Ambrosetti re-elaboration of Internal Market Scoreboard editions 8, 13 and 15

Internal Market – Transposition Rate – Speed – Example (Speed towards the target: difference between the distance from the target in 2001/2004 and 2006) 8. Transposition Deficit of Internal Market Directives April 2001 (EU-15) or June 2004 (EU-10) – June 2006 Countries moving away from the target between 2001 or 2004 and 2006 Countries approaching the target between 2001 or 2004 and 2006 OK OK OK OK OK OK OK OK OK OK OK OK OK OK Source: The European House - Ambrosetti re-elaboration of Internal Market Scoreboard editions 8, 13 and 15 Score 0.0 0.2 0.2 10.0 10.0 10.0 0.5 0.6 10.0 10.0 0.7 0.7 0.8 0.9 10.0 10.0 10.0 1.8 10.0 10.0 10.0 10.0 10.0 5.6 10.0 10.0 OK Countries already meeting the target

Speed Profile – Overview: 2007 League Table (EU-15) = The country has not yet reached the target set by the EU and has moved away from the target in the considered period of time = The country has not yet reached the target set by the EU but has approached the target in the considered period of time = The country has already reached the target set by the EU EMPLOYMENT EDUCATION R&D INTERNAL MARKET ENVIRONMENT

Speed Profile – Overview: 2007 League Table (EU-10+2) = The country has not yet reached the target set by the EU and has moved away from the target in the considered period of time = The country has not yet reached the target set by the EU but has approached the target in the considered period of time = The country has already reached the target set by the EU EMPLOYMENT EDUCATION R&D INTERNAL MARKET ENVIRONMENT n.a. = not available

Speed Profile – The Advisory Board “Observatory on Europe” Speedometer 2007 0 1 2 3 9 10 8 7 6 5 4 Speed Profile IT PL-HU CY MT NL CZ-FI ES DE BE RO FR LV LU EL PT BG-SK IE 6.5 8.0 EE LT AT SI UK DK SE 5.5 EU Average = 6.2

Speed Profile – The Advisory Board “Observatory on Europe” Speedometer 2007 The overall picture shows positive as well as less positive results , in particular: even if each new Member State has its own unique situation, their overall results in terms of speed of integration are rather satisfactory: Slovenia, in particular, performs outstandingly (4th place). Only Romania belongs to the “Very Slow” group among the EU-15, the major countries of Continental Europe are still approaching the select Lisbon Agenda targets too slowly It is still “Time To Move Up a Gear”!

The overall picture shows positive as well as less positive results , in particular:

even if each new Member State has its own unique situation, their overall results in terms of speed of integration are rather satisfactory: Slovenia, in particular, performs outstandingly (4th place). Only Romania belongs to the “Very Slow” group

among the EU-15, the major countries of Continental Europe are still approaching the select Lisbon Agenda targets too slowly

“ The fundamental aim of European unity must be to preserve our democratic way of life and our traditions of civilisation and freedom, and to strengthen our free national institutions. (...) This economic co-ordination can be sought by a whole series of methods - ranging from a customs union to a lowering of tariffs and to preferential tariffs; from a single confederal bank, established by a monetary convention, to which the various international banks would accede, to a single currency, whether this be for accounting purposes or cash transactions; from the abolition of quotas to a single market. (...) The determining factor in our work, the driving force, must be our political determination to achieve European unity. Economic co-operation is, of course, a matter of compromise between the natural desire for independence of each participant and overriding political aspirations. (...) So it is the political aspiration for unity which must prevail. We must be guided above all by the overriding realisation that it is essential to build a united Europe in order to ensure for ourselves peace, progress, and social justice.” Alcide De Gasperi – speech at the Consultative Assembly of the Council of Europe on September 15, 1952.

European nations should become, with time, “a vast common market in which none of the members find restrictions on their individual development, without however creating difficulties for others’ development […]. With the common consent of its populations, Europe is advancing towards a new era, a union […] in which all will bring their contribution to a common venture, whose fruits are destined to expand and render everyone’s lives safer. […] The League was founded for a peace based on rights and guaranteed by justice […] so that every man is given the opportunity to operate in the field in which his energies can best be employed for the community […] for a constant exchange of ideas and acquaintances to the advantage of all countries and for the liberty of trade, that exchange of natural and industrial products without restrictions that, alone, can satisfy the material needs of the populations”. Giuseppe Mazzini – Letter about the constitution of the “Giovine Europa”

“ The countries of Europe are not strong enough individually to be able to guarantee prosperity and social development for their peoples. The States of Europe must therefore form a federation or a European entity that would make them into a common economic unit.” “ Continue, continue, there is no future for the people of Europe other than in union.” “ Make men work together show them that beyond their differences and geographical boundaries there lies a common interest.” Jean Monnet

Frequently the most difficult decision is choosing the simplest way!

Be careful: there is team…

… and team!!! A LOT OF PRACTICE IS NEEDED

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