Competitiveness and Lisbon challenges

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Competitiveness and Lisbon challenges
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Economic growth scoreboard
Afghanistan 29.0 Turkmenistan 23.1 Equatorial
Guinea 20.0 Chad 15.0 Isle of
Man 13.5 Azerbaijan 11.2 Liechtenstein 11.0
Faeroe Islands 10.0 Armenia 9.9 Ukraine 9.4
Kazakhstan 9.2 China 9.1 Lithuania 9.0 A
rgentina 8.7
Qatar 8.5 India 8.3 Bhutan 7.7 San
Marino 7.5 Algeria 7.4 Latvia 7.4 Russia
7.3 Botswana 7.2 Vietnam 7.2 Cook
Islands 7.1 Nigeria 7.1 Albania 7.0 Tajiki
stan 7.0 Mozambique 7.0
CIA World Fact Book 2003-04
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Financially viable
4
EU - US
GDP Growth
Unemployment
Government budget
Balance of Payments
5
World Economic Forum scoreboard 2005

• GLOBAL
• Finland
• USA
• Sweden
• Denmark
• Taiwan
• Singapore
• Iceland
• Switzerland
• Norway
• Australia
• Netherlands
• Japan
• UK
• Canada
• Germany

• EU
• Finland 5.94
• Sweden 5.65
• Denmark 5.65
• Netherlands 5.21
• UK 5.11
• Germany 5.10
• Estonia 4.95
• Austria 4 95
• Portugal 4.91
• Luxemb 4.90
• Ireland 4.86
• Spain 4.80
• France 4.78
• Belgium 4.65
• Slovenia 4.59

16. Cyprus 4.54 17. Malta 4.54 18. Czech Republic
4.42 19. Hungary 4.38 20. Slovakia 4.31 21.
Lithuania 4.30 22. Latvia 4.29 23. Greece
4.26 24. Italy 4,21 25. Poland 4,00
Based on broad concept. Results very similar to
Lisbon benchmarking
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Economic policies
The introduction of the Euro put focus on
Structural Policies Lisbon was an answer Did
politicians listen?
Monetary Policy Fiscal Policy Structural
Policies
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There is a European Economic and Social Model
and it is characterised by large public sector,
focus on welfare state and emphasis on the
environment. Taxes as of GDP
Japan 26
China 16
USA 25
EU-15 40-55
India 17
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European Economic and Social sub models
Northern
Anglo-Saxon
Eastern?
Continental
Southern
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European Economic and Social sub models
Similarities Hands-off approach to
markets Differences Size of welfare state
Northern
Anglo-Saxon
Similarities Large welfare sector Differences
Approach to market
Nordic model combines a liberal approach to
markets with high quality welfare sector and
provides flexicurity
Continental
10
Reforms in Europe
Success stories
Strong need for reform
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Attitudes towards globalisation in Europe
Source IMD survey 2004. Index 0-10.
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Product market regulation 2003
OECD Overall Product Market Regulation Indicator
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State Control 2003
OECD Product Market Regulation Indicators
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Barriers to Entrepeneurship
OECD Product Market Regulation Indicators
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Government budgets in Nordic and Anglo-Saxon
models
16
Current accounts in Nordic and Anglo-Saxon models
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Re-introduction of Structural Policies
Global competition requires flexibility and a
higher knowledge base European population
requires confidence and security Target
Combining flexibility and security Flexicurity
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Does a big state prevent competitiveness?
Apparently not. This issue is not quantity but
quality.
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Public sector and competitiveness
WEF score
6
Fin
Swe
Den
UK
Spa
Ger
5
Bel
Fra
Ita
4
Tax of GDP
30
40
50
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Public sector and competitiveness

• Public sector reforms are essential for
  competitiveness agenda
• Value for money
• Combat corruption
• Modernisation (eGovernment)
• Good infrastructures
• From passive to active (labour market)

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Level of corruption
US 7.6 Croatia 3.4
Transparency International 2005
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Globalisation is working
30
85
Consumers get richer, but can we adapt and create
new, sustainable jobs?
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From the industrial society to today
IT
Logistics - distribution
Production
Design
RD
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Need for reform
Reforms are at least needed in labour market
and social welfare Innovation, entrepreneurship
and market
25
Innovation entrepreneurship and the markets
Europe must be better to grow SMEs Innovation
must be brought to the markets closer links
between research and real life Europes risk
culture underdeveloped
26
EU budget
EU budget can in general contribute in a limited
way to development of European competitiveness.
Budget is only 1 of GDP and ½ is for
CAP Coordination of national policies would be
stronger Focus and link to overall targets could
help, but the debate is now on marginal issues
on overall size and fight for national corners