“The Lisbon Strategy and Policy Coordination” Policy learning and experimentation in EU economic governance NEWGOV Workshop, London, 30 March 2006 Joe Grice HM Treasury and Chairman, EU Economic Policy Committee

Changing background to Lisbon Significantly, motivated by the “economics of envy” … …. Or at least of emulation. By 2004/2005 much more defensive. Motivation from the challenges of globalisation.

In 2000, not unambitious! The European Union to be “the most competitive and dynamic knowledge based economy in the world” by 2010

Results so far Policy settings – In absolute terms, not insignificant: OECD labour and product market indicators show differential improvements for EU countries but all positive. –In relative terms, less clear. Performance –Less reason for celebration. No major pick up in growth rate. –But structural vs macroeconomic explanation?

Rationale for coordination of structural policies Spillovers? Generally only mildly convincing. Though some exceptions eg competition policies, energy interconnectivities. Political economy of reform? More convincing but tricksy. Eg debates over net advantage of naming and shaming, the Structural Indicators and benchmarking.

The problem of focus By 2005, 100 Lisbon commitments/targets – many only tenuously related to a “competitive dynamic knowledge based economy”. Mid-Term Review consensus on need to streamline/ focus on growth and jobs. Commission response: 18 additional proposed targets.

The Commission as the driver of a focused reform programme? “The Commission”, as a collective noun. The Christmas tree effect. Avoidance would require greater coordination within the Csion than currently seems likely.

The Council as the driver? Which Council formation? Another collective noun. Implications for which DG is in the lead…. ….. And who is in the lead nationally? Even within ECOFIN, for example, absence of full agreement on what is needed.

Conclusion Limited but not zero success for Lisbon so far. What is needed for picking up the pace? –Construction of an unassailable case that structural reform indispensable ingredient. –Establishment of governance arrangements that help for most or all countries with the political economy of reform.