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Prospects for the Lisbon Strategy: How to increase the competitiveness of the European economy? CEPS Working Documents No. 224, 1 July 2005

Gros, Daniel. (2005) Prospects for the Lisbon Strategy: How to increase the competitiveness of the European economy? CEPS Working Documents No. 224, 1 July 2005. [Working Paper]

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    Abstract

    The main message of this contribution by CEPS Director Daniel Gros is that lean times are here to stay for the old member states. The principal reasons are deep seated: Deteriorating demographics continue with the ratio of working age population to total population falling. There are thus fewer and fewer producers for every consumer and recipient of transfers. On top of this, productivity growth is declining as labour quality is dropping and investment growth is slowing. In the new member countries the demographic trends are also unfavourable, but they are (more than) compensated for by catch-up growth as a relatively well educated work force is finding its place in the internal market. What does this diagnosis imply for the role of structural policies? No Lisbon agenda can change demographic trends, nor can it change the declining capital/labour ratio due to insufficient investment growth. But structural reforms might counteract the impact of these two negative trends. Moreover, the performance gap between big and small member countries suggests that policy can make a difference. Nevertheless, Gros despairs that EU policy-makers will likely continue to follow policies that emphasise short-term expediency at the expense of longer-run gains, as reflected in the reform of the Stability and Growth Pact agreed earlier this year.

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    Item Type: Working Paper
    Uncontrolled Keywords: Structural policies.
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > Stability and Growth Pact
    EU policies and themes > Policies & related activities > Lisbon StrategyAgenda/Partnership for Growth and Employment
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Working Documents
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 31 Mar 2007
    Page Range: p. 20
    Last Modified: 15 Feb 2011 17:43
    URI: http://aei.pitt.edu/id/eprint/6668

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