Discussions of the Lisbon Strategy are bedevilled by complexity, but the PES Group's contribution to the mid-term review of the Strategy 2005 makes just three arguments about why its first five years have been a disappointment - even if there has been progress in some areas - and what needs to happen if the next five years are to be better:

 

 

For all its problems, Europe has an economy and a social and environmental model which stand comparison with any in the world. In a recent global quality-of life survey, European countries occupied 9 of the top 10 places, and the EU's most successful national economies outperform the US on most economic and social indicators. But we need to do better.

 

Europe still lags in economic growth, employment levels and some key indicators of economic dynamism, such as rates of innovation and presence in cutting-edge sectors such as IT, biotechnology and nanotechnology. And new challenges, such as the ageing of the population, the growing pressures on the natural environment and the growing competitive strength of Japan, China, India and others, mean that Europe faces a more intense pressure than ever to raise its game.

 

At the heart of the Lisbon Strategy is something very simple, yet poorly understood: the Lisbon Strategy is the expression of the economic, environmental and social model through which Europe will build its future - what the PES Group call, in the attached policy paper, a "Europe of excellence". In this model, it is a profound misunderstanding to talk - as many commentators do - of a trade-off between the economic, social and environmental dimensions.

 

The essence of the Lisbon Strategy is the interdependence of economic, social and environmental progress.

 

Europe's choice, expressed in the Lisbon declaration, is to base its competitive strategy on excellence, on the high quality of its infrastructure, its public services, its environment, its welfare systems, its workforce, its labour markets, its companies and much more. Europe has no future trying to compete as a low-cost producer in a global economy.

 

We cannot and should not seek to imitate the lowest labour costs, most biddable labour forces, lowest taxes, most lax environmental, social and health and safety standards of our competitors. Such a strategy cannot work, and we cannot save our economy by destroying our society.

 

The Lisbon alternative is to recognise that, in favouring investment and creating an environment where world-beating companies can flourish, Europe's social and environmental model is not an obstacle but an ally. Investors will choose Europe for its skilled workforce, its vibrant universities and research centres, its first-class communications, its efficient public administration, its social peace, its quality of life. These are the source of Europe's competitive edge and can help build the agile, fast-moving companies of the 21st century.

 

Defending a "Europe of excellence", defending high social and environmental standards and good public services, does not mean defending the status quo. The argument is that these things can be, and must become, part of a winning economic formula - not that existing social and environmental policies, or existing regulatory regimes, always fit this bill. In the Lisbon Strategy, excellence is a source of European competitiveness, not an obstacle.

 

Therefore, the PES Group sets out the radical changes needed in several key policy areas, if Europe is to make a success of its Lisbon ambitions:

 

 

Implementation of the Lisbon Strategy also requires a political engine at European and national level, capable of advancing the agenda in line with the preferences and priorities of European citizens. This is not the case today. When Ministers return to national capitals, they face on the whole little or no pressure from Parliaments, Press or public to deliver on the commitments they have signed up to at Summits. The reason lies partly in the complexity of the Lisbon Strategy, partly in the lack of openness in its procedures.

 

The PES Group endorse the proposal to focus on fewer Lisbon targets and actions. We have outlined in our PES Group position paper on which balanced priorities and concrete activities the Lisbon's implementation at European and national levels should be designed.  Moreover, the PES Group set out further proposals for:

 

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