13/03/2007 4:59:12 pm
Measuring the Right Things for Success? I just had a very nice meeting with Katinka Barysch, Chief Economist at Centre for European Reform. We talked about Europe, reform strategy and Sweden. Among many other things, the CER publish an annual scorecard showing how the EU countries are doing measured against the aims and proposals of the so-called Lisbon Agenda. In the 2007 edition, Sweden ends up second best. Does this mean that almost everything is great here and that little more needs to be done?

No. The Lisbon Agenda contains several nice ambitions and a number of policy proposals, conceived by the EU leaders. It is thus a political compromise with hardly any implications for controversial issues, such as taxes or labour market regulations. Everything in it is not irrelevant or just political correctness, but a lot is. And it leaves out several of the areas with great problems and thus a real need for reform.

It is good to score well on these matters too. But the Lisbon Agenda is a bit like the famous joke among economists about a bikini: the important parts are hidden. Fortunately, there are numerous other studies - by the OECD and others - that point out the importance of lower and flatter taxes, de-regulations in the labour market and competition in welfare services. Many European countries need reforms in those areas - not least Sweden. With such reforms, a country will score well in reality as well as in scorecards.