A neo-liberal takeover

Although initially a social-democratic project, the Lisbon Strategy did not succeed in promoting innovation or social cohesion in the EU. On the contrary, when taken over by the European Commission, it was transformed into a neo-liberal programme — a trend which a French economist argues is even more pronounced in the 2020 Strategy destined to replace it.

Published on 1 March 2011 at 15:12

There is no denying the fact that the neo-liberal (anti-)reformers have qualities that their adversaries often lack: they know what they want and how to obtain it, and they are patient and tenacious. Once again, their quest for dominance can be seen in policy shifts in the European Union.

We all remember the “Lisbon Strategy” launched in the year 2000, which aimed to make the European Union "the most competitive and dynamic knowledge-driven economy by 2010."

This was just one in a range of objectives, which in virtually every case remained unrealised, in the fields of innovation, “social cohesion” and employment — although at one point, the rate of employment did come close to the stated goal of 70% of the population between the ages of 20 and 64.

Lisbon Strategy - originally inspired by the left

However, spending on research and development increased only slightly, remaining well below the target of 3% of GDP. As for social cohesion, suffice it to say that the risk of poverty (after social transfers) has increased.

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This mediocre performance did not prevent the Commission from claiming that the Lisbon strategy had resulted in the creation of 18 million jobs in the EU. But this figure only took into account the increase in employment in Europe between 2000 and 2008. And in passing, we also should point out that half of the increase, which was grandiloquently credited to the Lisbon Strategy, concerned part-time rather than full-time jobs.

Perhaps the most comical aspect of this story is the fact that the Lisbon Strategy was originally inspired by “left-wing” academics and initially implemented by supposedly “left-wing” governments.

Everything in Europe supposed to be “smart"

But from the outset, the whole business was so ill-conceived that the Barroso commission had absolutely no trouble in taking over the movement and transforming it into mild-mannered, information technology oriented, social-democratic plan accompanied by a programme of neo-Thatcherite structural reforms.

That said, the Lisbon Strategy only had a weak impact on the structural reforms implemented in EU states, which were mainly the result of compromises in national politics — even if it did provide national level players with a ideological and political resource.

The sequel to this story is “Europe 2020”: a strategy that aims at “smart, sustainable, inclusive growth.” In ten years’ time, everything in Europe is supposed to be “smart”: growth and the economy, regulation, specialisation, houses and networks... We will even have “smart” traffic management. At the same time, everything — and once again that includes growth and the economy — will be sustainable.

Deregulation, privatisation, and dismantling of public service

Apart from that, the strategy does not have much in the way of surprises: a 75% rate of employment target, an industrial policy that aims to “improve the business environment” with — you guessed it — “smart” regulation to reduce “the administrative burden on companies.”

And it goes without saying that none of this would be possible without a “stronger, deeper, extended single market” backed up by a reinforced “Services Directive” (think Bolkestein) and the implementation of “competition policy” (ie. deregulation, privatisation, and the dismantling of public service), which will supposedly promote growth and innovation.

In short, as the Corporate Europe Observatory has pointed out, Europe 2020 is not only not new, but also draws part of its inspiration from the European Round Table of Industrialists’ Vision for a competitive Europe in 2025.

“Healthy” public finances will be a virtual prerequisite

The one aspect of the Europe 2020 that is new is its approach to governance which ought to be understood in the context of the latest innovation in the field, the European Semester, which has ordained that national budgets will be examined by the European Commission and the European Council before being adopted by member state parliaments.

“Fiscal discipline” and structrual reforms will be combined to achieve “stronger governance”: “Fiscal consolidation and long-term financial sustainability will need to go hand in hand with important structural reforms, in particular of pension, health care, social protection and education systems.” (Europe 2020, page 24).

On the level of structural reforms, nothing particularly restrictive will be implemented, but new political resources will be made available to national players who wish to follow the neo-liberal route, and “healthy” public finances will be a virtual prerequisite for governments that wish to preserve their social welfare systems.

Translated from the French by Mark McGovern

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