Economics and Policies of an Enlarged Europe

Economics and Policies of an Enlarged Europe

Carlo Altomonte and Mario Nava

Carlo Altomonte and Mario Nava have written a very rigorous text in an accessible and jargon-free style, ensuring easy acquisition of invaluable insights into the European economic set-up and the possible evolution of EU policies, including an update on the reform of the Growth and Stability Pact and of the 2007–13 Financial Perspectives.

Chapter 5: Managing the EU Economic Policy: The Lisbon Agenda

Carlo Altomonte and Mario Nava

Subjects: politics and public policy, european politics and policy

Extract

5.1 INTRODUCTION In the previous chapters we have seen how the EU has tried to achieve growth through the process of economic integration. We have in fact analysed the (static) growth implications of the Customs Union (Chapter 2), the gains, both static and dynamic, achievable through the single market (Chapter 3) and the contribution to growth (and stability) of the EMU (Chapter 4). We have also considered that what really matters for the EU economy is to achieve a permanent boost to growth from the process of economic integration. In this respect, the tools previously summarised represent a valid contribution, but ultimately a permanent increase in the growth rate of a given economy depends on structural changes in the long-run supply conditions that determine its potential output. To this purpose, the so-called Lisbon Agenda of reforms, implemented in the Union from the year 2000, aims precisely at improving in this sense the EU economic performance. The aim of the Lisbon Agenda, or process, is in fact easily summarised in a sentence: to implement structural reforms so that Europe enjoys higher levels of sustainable growth in a stable macroeconomic framework and in a climate of social cohesion. Clearly, while the risk of pompous rhetoric is always behind declarations of principles of this kind, the difficult part of the Lisbon Agenda resides in its practical implementation, that is, how to meet this goal. In order to better understand the Lisbon process and then evaluate its outcomes, this chapter first gives a...

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