Half-time report from Lisbon

Four years have passed since a previous European Council meeting in Lisbon set the goal of making the European Union the most competitive and dynamic knowledge-based economy in the world.

Presenting the Commission's 'Spring Report', commission president Romano Prodi warned Member States: 'Four years after Lisbon, it is clear that we are going to miss our mid-term targets. Member States do not seem to realise that 2010 is around the corner.' Missing the mid-term targets - with the halfway point towards the target date of 2010 just months away - should 'serve as a wake-up call to governments,' he emphasised.

As economic recovery begins to take hold in Europe, the commission wants to see Member States using this as a spur to reinvigorate the Lisbon strategy. Furthermore, with EU enlargement bringing ten new states into the fold, Prodi believes this will provide significant impetus.

For the coming year, the Commission has set out three key priorities where Member States should take action. In some cases, this means taking decisions at EU level, adopting measures that will encourage enterprise. In others, action is needed at national or lower levels to unblock the business environment, making it easier for entrepreneurs to grow companies which will each contribute to the EU's economic growth. Still others require less direct action, which nonetheless will improve the skills or the motivation of individuals to play their role in a dynamic economy.

The first priority set out by the Commission is to improve investments in knowledge and networks. Under this heading come EU actions such as Quick Start and the Growth Initiative, designed to speed up investment in critical infrastructure for transport and telecommunications, as well as on research and innovation. Investing in research, to move towards the target of investing 3% of GDP (compared with the 1.9% today), is also a fundamental part of this priority.

In addition, investment in education and training is vital if sufficiently well qualified human resources are to be available.

Priority number two is that of strengthening European competitiveness. Here, there are a number of legislative proposals currently winding their way through the Parliament and Council, such as the proposed framework directive on services that would make it simpler for firms to offer services throughout the Union. In addition to these legislative proposals, the Commission also wants to see greater synergies developing between industrial environmental and research sectors.

Thirdly, the Union's ageing population needs to be addressed. 'Active ageing', whereby older workers are encouraged to remain in the workforce, should be encouraged, in particular by abolishing financial incentives for early retirement. Healthcare systems need to be modernised, making them more financially viable as patients are living longer.

Above all, what Prodi wants to see from Member States is the transformation of statements on the European stage into action at national level. 'At European level,' he says, 'we have advanced steadily into setting the right priorities, but Member States have not demonstrated enough ownership.'

Specifically, he notes Member States need to show a 'greater readiness to adopt the requisite national implement legislation. According to the latest survey, national legislation is still needed for an average of around 40% of directives adopted in connection with the Lisbon objectives. This is holding up the implementation of the strategy in significant areas such as electronic communications and the integration of the railway networks.'

The Commission acknowledges that it is not all bad news. Some six million jobs have been created since 1999 despite the economic slowdown, there have been significant reductions in long-term unemployment rates, and female employment rates have gone up.

Prodi stressed: 'We need to make sure the reforms do not remain patchy and isolated. They will have substantial impact, only if they are implemented in a co-ordinated way and as part of an overall strategy.'

A former Member of Parliament, Gwilym Roberts chaired many House of Commons Committees covering business and consumer affairs and served in the DTI.