GUEST EDITORIAL: THE LISBON AGENDA STILL HAS A MISSION.

To dismiss the Lisbon Agenda as dead is too simple even if many people have already done so, frustrated by what they see as a lack of progress in making Europe more competitive. Based on the results so far, the frustration is understandable. But the Lisbon process is still vital for Europe's future, and can still serve as a valuable declaration of intent.

One important achievement is obvious: the Lisbon Agenda has sharpened public awareness about growth and jobs in Europe. Competitiveness is now being discussed more than it ever has before, and the debate has acquired real momentum.

Wide differences in Europe

Looking across the 25 EU member states, performance in terms of competitiveness varies widely and there is a clear geographical dimension to the variations. While northern Europe is generally doing well, in southern and eastern Europe the knowledge-base is being developed only slowly with obvious risks for the future. The dangers are apparent not so much in current growth figures as in a comparison between present growth performance and future prospects.

The fact that quality and performance of the public sector follows the general patterns of competitiveness adds to the concern. In Europe, where it is such a large component of the economy, it is all the more important that the public sector should be efficient, non-corrupt, and working with markets towards the creation of a competitive society.

The need for reform.

Ahead of this year's review of the Lisbon Agenda, the European Policy Centre made its own recommendations to promote sustainable competitiveness (www.theepc.be), based on input from large corporations, NGOs, European regions, venture capital organisations and trade unions. A principal point of agreement was that labour markets in Europe need urgent reform.

The rapid impact of developments around the globe today obliges European labour markets to react with greater flexibility. Jobs can no longer be guaranteed for life. But a crude hire-and-fire policy cannot be the answer in Europe. The alternative could lie in a combination of flexibility and social security or flexicurity, as it is known in the Nordic model. This requires an active labour market policy, geared towards encouraging people to meet the new challenges head-on, by equipping them, through counselling, education and training, to aspire to different and better jobs, rather than remain passive...