Europe needs to change and change urgently. This is what most of the top officials are saying, otherwise Europe may continue to decline, and given the speed at which the modern world is moving forward and changing, this will happen much faster than it seems. The EU has been losing key economic competitors for a long time and the gap continues to widen. China will overtake the EU in terms of economic size as early as 2025, barring some cataclysmic event in the Chinese economy.

China, which 10 years ago seemed more like a global manufacturing contractor that serves the technologically advanced countries, is now overtaking Europe in its priority technologies. Europe is by a wide margin the leader in the so-called green transition, i.e. achieving environmental and climate neutrality. However, China has been able to achieve almost total dominance in the global solar panel market.

Of course, the negative trend in the European economy did not start yesterday. The lagging or complete lack of results in new and emerging technology sectors such as computers, the Internet, semiconductors, robotics, etc. was already evident in the 1990s. 

At that time, however, the total size of the EU economy was 50% larger than the US economy, and this key indicator and others suggested to European leaders that there was a problem, but it had not yet seriously affected Europe's well-being, especially since the EU's central authorities had only gained significant powers by the early 2000s. By then it was clear that the backlog in key sectors was growing. South Korea or Taiwan in the late 1990s and early 2000s were not yet as developed as they are today, but companies from these countries had already overtaken Europe in semiconductors, which proved Europe's backwardness very well.

The failure of the “Lisbon Strategy”

In the early 2000s, the European Union adopted a strategy to accelerate economic growth known as the Lisbon Strategy. Although the exact date of its approval was 2000, close to the year 2002 you mentioned, this plan was a key plan for the EU in its quest to improve the global competitiveness of its economies.

The essence of the Lisbon Strategy was to make the EU what it claimed to be “the world's most dynamic and competitive knowledge-based economy”. The strategy set ambitious goals to create favorable conditions for sustainable economic growth and social welfare, without increasing inflation. Special attention was paid to technology development, innovation, increasing employment and improving the social security of citizens.

Measures proposed under the Lisbon Strategy included investment in education and research, creating conditions for a more flexible labor market, improving the business climate, and developing innovative and environmentally sustainable industries. One important area was the liberalization of markets for goods and services, in particular the energy and telecommunications sectors.

Results of the Lisbon Strategy

However, not all of the stated objectives were successfully achieved. One achievement has been the improvement of digital infrastructure and the development of the IT industry, which has provided a significant boost to growth in these areas. In some countries, progress has been made in increasing employment and improving labor market conditions. Increased cooperation in research and development, which has led to significant technological advances in Europe, can also be considered a success.

Outcomes of the Lisbon Strategy

The Lisbon Strategy has partially failed in achieving many of its ambitions. Economic growth in the EU has not reached the desired level, and the gap in growth rates with the US and other world leaders has persisted. Also, unemployment remained high in some countries, and attempts to reform social systems were not always successful. Critics also pointed to a lack of coordination among EU member states and the absence of clear mechanisms to monitor the fulfillment of targets.

Assessments by top EU officials of the results

One of the most prominent EU officials, Jose Manuel Barroso, who served as president of the European Commission from 2004 to 2014, assessed the strategy's results. Barroso recognized that the Lisbon Strategy set ambitious goals but faced a number of difficulties in realizing them. 

He emphasized that while some successes had been achieved, particularly in the areas of innovation and employment, many structural problems, such as low productivity and weak market integration, had not been addressed. Barroso emphasized that one of the reasons for the failure was the lack of sufficient coordination among EU countries, as well as the global economic crises, which make it more difficult to achieve the goals.

Another assessment of the Lisbon strategy was given by Jean-Claude Juncker, who became president of the European Commission in 2014. He noted that the Lisbon Strategy was an important step for Europe to modernize its economy and strengthen its position on the world stage. 

However, Juncker believed that the EU had underestimated the scope of structural reforms needed to achieve the ambitious goals. He stressed that without more decisive and deeper changes in the economy, especially in the area of labor laws and pension systems, the Lisbon strategy could not have been fully successful. In his view, the strategy showed that without the political will for more serious reforms, the European economy remains vulnerable.

Herman Van Rompuy, former president of the European Council, also assessed the Lisbon Strategy. He called it “a failure but instructive,” pointing out that the EU failed to adapt in time to the challenges of globalization and financial crises. 

Van Rompuy noted that while the strategy laid the foundations for technological development and innovation, many countries failed to implement the reforms needed to improve competitiveness. He emphasized that the Lisbon strategy was a lesson for future programs, such as Europe 2020, which took into account the mistakes of the past and took a more pragmatic approach to economic growth and social policy.

Conclusion

The European Union needs immediate and profound change if it is not to lose its role in the global economy. Most senior officials agree, as the ongoing recession threatens to have serious consequences for the region. In a rapidly evolving global market, the EU risks becoming even more vulnerable. China, the US and other global economic powers are outpacing Europe on many key indicators, and the development gap is only widening. In just a few years, China is projected to overtake Europe in terms of economic size unless there are major failures in its own system.

Europe must realize that the old ways no longer work and a new strategy is needed to deal effectively with today's challenges. The Lisbon Strategy and its subsequent programs have shown that ambition without real action and deep reforms will lead to new failures. To regain competitiveness, Europe must pay more attention to the development of innovation, technology and productivity, while maintaining its commitment to environmental and social standards.

Met Sorrows

Legal expert with 30 years of experience.