One example of jargon that we get from the European Union is what is referred to as the Lisbon Agenda. The Lisbon Agenda is the result of a meeting of heads of government of the then 15 member states of the EU, held in the capital city of Portugal in 2000 and which launched a series of very ambitious reforms at national and European level. The heads of government of the time aimed to make the European Union "the most dynamic and competitive knowledge-based economy in the world" by 2010.
This reminds me of a book written by academics from the Massachusetts Institute of Technology in the first half of the 1990s, who actually predicted that the EU economy would be the strongest economy in the world by 2010, beating the American and the Japanese economies in a book called Head to Head.
They had attributed this assertion to a number of factors, including a better protection of the environment, a better educational system, a proper social net, an effective internal market and the ability to boost innovation. The EU performance on each of these issues was expected to be so superior to that of the US and the Japanese economies, that the expectation was that these would be left far behind by the EU economy.
We are now half way through the process and the results achieved are not unsatisfactory; to the extent that at the beginning of this year, the EU relaunched the Lisbon Agenda. It was recognised that there was not enough focus on the various issues that were meant to achieve jobs and growth, while achieving a better protection of the environment and securing a strong social net. This was not surprising considering that the reform package consisted of 28 main objectives, 120 sub-objectives and 117 different indicators.
At the relaunch phase it was decided to focus efforts on two main areas - productivity and employment.
Moreover, one needs to take into account the economic uncertainty that has characterised the international economy in the last five years; an uncertainty that has been caused by a slowdown in world trade, accounting scandals, war and terrorism.
Thus, economic growth in some member states of the EU remained around the one per cent level. There were also some internal weaknesses such as the low productivity growth.
It is estimated that the difference in the growth of the gross domestic product between that of the United States and that of the EU is attributable to a lower productivity rate per hour in the EU. The EU also lags behind the US in terms of the employment rate. This would tend to explain the difference in GDP per capita.
Thus, the renewed focus on employment and productivity in the relaunched Lisbon Agenda is more than understood. On the other hand, the factors that lead to growth in employment and productivity remain the same, namely trade, infrastructure, education, a skilled and flexible workforce, research and development, regulation.
The EU has published a number of indicators that are meant to measure progress on each of these factors, thereby creating a league table of the various member states. Such a league table would always be something worth gossiping about but we should not get lost in it. A league table does not necessarily measure progress; it just tells you whether we are faring better or worse than other countries.
The discussion of the Lisbon Agenda also made it to our national Parliament, with a three-day debate on the subject. I believe that it was a fruitful discussion as it gave Parliament the opportunity to discuss issues such as competitiveness, productivity, economic growth and the like. It would be impossible to go into a comprehensive and exhausting discussion on each of the items on the Lisbon Agenda in this contribution. I would say that each of these items merits a discussion on its own in the coming weeks.
It seemed to me that the debate in Parliament did bring about an element of consensus as to what can contribute to growth in employment and productivity in the economy. If anything, the disagreement was on how to achieve this growth. It would indeed be a great pity if this discussion were to die down, because I strongly believe that, for the first time, we have a framework within which the debate about the economy in this country should be conducted.
There is general agreement that we need to make the climate more favourable to business and enterprise; we need to develop further our infrastructure to support economic activity; we need to make our labour market more adaptable and more inclusive to achieve employment growth. These become more achievable if we have a serious, open and objective discussion on the Lisbon Agenda that could in turn spur a revamp of the discussion on the social pact. It would be a great pity if we were to lose this opportunity.