BRUSSELS, 27 January 2005 — European Commission head Jose Manuel Barroso yesterday called for a “European renewal” to revive the flagging momentum of the EU, which he said is at a crossroads needing urgent economic and political reform.
Barroso, setting out his goals after taking office in November, said the reform task facing the expanding bloc is as big as any of its strategic achievements over the past two decades. “We must release Europe’s enormous untapped potential,” he said, underlining to the European Parliament that economic growth and job creation are his top objectives for the next five years.
On the economic front the EU is battling to keep alive its so-called Lisbon Agenda, an ambitious program launched in Portugal five years ago aimed at making Europe the world’s most dynamic economy by 2010. Growth in the 12-nation euro zone is set to reach 1.4-2.4 percent this year, according to official forecasts, well behind the United States or the export-led economies of Asia.
Critics say the EU now has virtually no chance of meeting its 2010 goal, even if EU leaders are due to relaunch the Lisbon strategy at their spring summit in March. Barroso, a liberal former Portuguese prime minister, said that while the EU has evolved beyond being just an economic club, prosperity remains the key target in the years ahead. “The top priority today is to restore sustainable, dynamic growth and jobs in Europe,” said Barroso, lamenting that Europe’s economy has failed to keep up with key global partners over the past decade. “We must launch a period of European renewal,” he added.
And this applies not only to the economy, he said. The EU is sputtering politically, battling to digest its “big bang” expansion from 15 to 25 states last year while at the same time facing mounting public Euroskepticism. More enlargement headaches are yet to come: Romania and Bulgaria are due to join in 2007, with Croatia not far behind. Turkey and a handful of ex-Yugoslav states are also waiting in line.
“We must release Europe’s enormous untapped potential,” Barroso said in a statement released as he spelt out his 2005-2009 game plan to the European Parliament. “I believe that we must embark on a process of transformation as bold and as courageous as the single market in 1985, the launch of the single currency or the unprecedented enlargement of the European Union to 25 member states.”
The 12-page document was a response to the EU’s spectacular failure to meet the goals it set itself in 2000 under the “Lisbon Strategy”, a drive to make Europe the most competitive and dynamic economy by the end of this decade. Officials say the “2010” target will be quietly dropped when the Commission next week presents new proposals to meet the Lisbon goals.
The bloc must get to grips with such challenges if it wants to boost its role on the world stage as an equal partner alongside the United States and other countries, said Barroso. “Europe is at a crossroads. The status quo is not an option. I believe that the time for courageous change has come,” he said.
One huge cloud looming over the EU project is a series of referendums on a controversial first-ever constitution, designed to prevent decision-making gridlock in the expanding bloc. Brussels is crossing its fingers for ballots in about half of the EU’s current states over the next 18 months — including notoriously euroskeptic Britain, which on Wednesday revealed the wording of its referendum question.
“The paradox is that Europe has confounded its critics in its capacity to achieve, and yet significant sections of the public are not convinced that Europe is on the right track,” Barroso said. But the economy remains the top priority, he said, stressing that Europe must constantly strive to promote business-friendly policies, and not be content with blustery rhetoric.
“We must embark on a process of transformation as bold and as courageous as the single market in 1985, the launch of the single currency, or the unprecedented enlargement of the EU to 25 member states,” he said. “This will require real leadership, both by European institutions and by governments ... I believe we must build a dynamic partnership for renewal, a partnership for prosperity, solidarity and security in our continent.”
Barroso’s paper proposes no grand new projects for the EU, instead aiming to “take the Europe we have and make it work”. It also calls for Europe to become a more effective “world partner” but focuses less on foreign policy than the economic agenda.
Since 1996 the EU’s average annual growth, in terms of output per head, has been 0.4 percentage point below that of the United States. The productivity growth rate in the EU’s pre-enlargement bloc of 15 nations averaged 1.4 percent over the same period compared to a US rate of 2.2 percent.
But knives were already out in the EU legislature for the former Portuguese prime minister, a market-oriented reformer who prescribed a bitter austerity pill for his own country in 2002.
Socialists and greens warned that Barroso’s five-year dash to tackle the 25-nation bloc’s pallid economic growth and its persistently high unemployment rates could undermine Europe’s “social model” and respect for the environment.