Meeting the Lisbon targets

Employment and education are the Greek government’s priorities to meet the targets of the so-called Lisbon strategy – the European Union’s blueprint for transforming itself into the world’s most competitive economy by 2010, notes Eleni Louri-Dendrinou, the coordinator of the strategy’s agenda in Greece and head of the prime minister’s economic advisers in an interview with Kathimerini. The two sectors, she points out, are to receive the largest expenditure rise in the 2005 budget. A report by a consultative committee chaired by former Dutch Prime Minister Wim Kok on the progress of the Lisbon agenda, released last week, shows Greece as a laggard among the EU’s 15 old members as regards most of the 14 targets set. The country is especially weak in employment, research spending and environmental protection. Louri-Dendrinou also said research and technology would be promoted through European programs, along with institutional changes for the environment. The strategy’s targets for the whole of the European Union, and of course Greece, have to be ambitious enough to generate sustainable growth even beyond 2010. What is the Lisbon strategy and what are its targets? It is a set of reforms aimed at turning the EU into the most competitive, socially cohesive, technologically advanced and environmentally friendly economy in the world by 2010. It certainly is an ambitious but essential target for Europe’s chosen economic and social model. Each country has to apply a series of structural changes, as it sees appropriate. However, progress for each member state is measured with objective and comparable indexes. Why was the Kok report essential? It is a fact that the first phase of the strategy coincided with a period of global recession. Also, the content and methods of reform drew a lot of criticism for being generally unclear. As delays in meeting targets across Europe became obvious, a high-level group was set up by Wim Kok in spring 2004 to identify the process’s weaknesses and recommend improvements or amendments. Greece remains a laggard among the 15 old EU members as far as the Lisbon targets are concerned, despite some progress after 2000, according to the Kok report. Is this pace sufficient and what are the government’s priorities to meet the targets? In the report, we have one of the highest percentages of people aged 20-24 with at least a secondary education. We also have high development and private investment patterns, mainly thanks to the Olympics, as data refer to the year 2003. This is where the good news ends. In the other 12 indices in the report, we have one of the lowest positions, with our record on the environment and employment being really disappointing. After successfully staging the Olympic Games, we know we can do better and obtain a higher adaptation rhythm. The new government has the Lisbon targets high in its agenda. Employment and education are clearly the priorities, with the former receiving 900 million euros more than in 2004 and the latter a share higher than 10 percent in the Public Investment Program. Research and technology will be systematically promoted, mainly though European programs. The environment requires a location plan, permits for energy production from renewable sources and laws to reduce pollution. Our gross domestic product per capita is only 73 percent of the European average. What is the growth rate required to reduce the distance? We need a growth rate of one or two percentage points on top of the European average every year. We aspire to achieve an even higher rhythm, though: In 2005 we foresee a 3.9 percent rate in Greece, while Europe’s 15 will average at 2.2 percent. We are intensifying efforts, introducing measures to mobilize the private sector, liberalize markets, reduce bureaucracy and support new enterprises. Greece’s employment rate is at 57.8 percent, with the target at 70 percent; the women’s working rate stands at 43.8 percent, the target being 60 percent; and older people’s is 42.1 percent, 7.9 points under the target. How can new jobs be created to meet the targets by 2010? New jobs come from development, education and change of mentality. It is very disappointing that only 43.8 percent of Greek women are employed, compared to 56 percent in Europe and particularly 75 percent in Denmark. Increasing employment needs a flexible framework, modern education and training programs and development in the sectors that can absorb a well-educated workforce. Greece is turning into an economy of services and that is where we have to focus on. Do you think the Lisbon targets can be met by 2010 by the EU members and particularly Greece, or should the target date be postponed? I estimate the second phase of the strategy’s application will present more effective reforms. This is thanks to the EU’s overcoming of uncertainties and dilemmas compared with the enlargement and its orientation expected back in 2000. Moreover, Lisbon’s targets are a significant factor in the common course of its members. There should not be a more «realistic» approach to the targets’ ambition. Targets ought to be ambitious. After all, 2010 is just a reference point, when members will check their progress. The wider objective is to lay the groundwork for unhindered and viable development even after 2010. The same goes for Greece: Our country is lagging considerably in many aspects. However, the government and the prime minister are convinced that real convergence has to pass through the Lisbon targets. The recent audit marks a new start for our economic strategy to promote convergence in real terms. The audit not only reinstated Greece’s credibility, but also allows us to plan ahead based on real data for the best possible results by 2010 and beyond.