Lisbon Review Looks at Europe's Competitiveness

Ten years ago the European Union pledged to become “the most competitive and dynamic knowledge-based economy in the world” by 2010, and set out a number of policies aimed at meeting that goal, which were dubbed collectively the Lisbon Strategy.

The study published on Sunday is the fifth and final review of the progress made by EU countries in achieving the goals for reform set out in the Lisbon Strategy, and it also measures the performance of EU candidate countries and EU potential candidate countries.

The report looks at areas including information society, innovation and R&D, liberalisation, network industries, financial services, and enterprise environment, as well as social inclusion and sustainable development.

In the rankings, Romania stands at 26 and Bulgaria at 27 out of the 27 EU member states, with particular weaknesses noted in R&D and innovation and liberalisation. The report notes that the two countries have "low R&D spending, companies that are not aggressive in adopting new technologies, significant regulatory burdens and government policy-making that is considered among the least transparent in the world."

The Forum in its report applied the Lisbon criteria to candidate and potential candidate countries, as well as other states in Eastern Europe, in order to indicate the competitiveness of the entire European region.

Montenegro and Croatia remain the top performing economies in the non-EU group, with Montenegro ranking slightly higher than Croatia. Meanwhile, Bosnia and Albania remain the lowest ranking countries in a list of states that includes both the Western Balkans region and Eastern European countries that have adopted a European Neighborhood Policy Action Plan, such as Georgia and Ukraine.

In some categories, Balkan countries outperform EU member states. Montenegro is ranked higher than the bottom five EU states- Greece, Poland, Italy, Romania, Bulgaria. Meanwhile, Croatia holds the same ranking as Greece and is higher than the bottom four EU countries.

The report notes that "Montenegro’s greatest strengths are in the dimensions of financial services and social inclusion, both areas where it scores above the average of the Accession 12 group of countries." Meanwhile Croatia scores well concerning network industries and efforts toward sustainable development.

Despite their high scores, both countries continue to suffer from heavy regulation and long and difficult procedures for starting up businesses, according to the report.

Macedonia and Serbia, which fall in the middle of the non-EU country ranking list, are recognised for strengths in enterprise environment. The report notes in particular Macedonia's "good business start-up environment and a relatively supportive regulatory structure." Points of weakness for both countries were found in social inclusion and sustainable development.

Albania and Bosnia and Herzegovina rank at the bottom of the list of non-EU countries, behind all the Balkan states and Azerbaijan, Turkey, Georgia, Ukraine, and Armenia. While Albania shows comparative strengths in enterprise environment and social conclusion, both countries rank low in all other indicators, and significantly below EU averages.

According to the report, serious efforts must be made to bring the two countries more in line with EU standards in the areas addressed by the Forum.