The European Union has an internal market of around 480 million people. Around 90 percent of all goods and services produced in Europe are also consumed in the EU member states. This high degree of internal market integration is a precondition of politics being able to assert itself in this era of globalization. Analysis of the current situation, however, shows that that the EU has far from realized its potential in recent years. For the sake of Europe’s economic advancement and to overcome the increasing social tensions in 2000 the European Union brought into being the Lisbon Strategy. Its aim was to make the EU into »the most competitive and dynamic knowledge-based economy in the world« by 2010. Decisive in this respect is the integration of economic, social, and environmental aspects.

Mid-term evaluation of the Lisbon Strategy was a sobering experience, however: barely one of the agreed interim aims had been achieved. One of the reasons was undoubtedly the lack of commitment on the part of the member states. Another was the rigid interpretation of the Stability and Growth Pact. Apart from that, the conservative and neoliberal camp is dominated by a selective perception and implementation of the Lisbon Strategy. While deregulation was enthusiastically pursued the expansion of political and economic coordination fell by the wayside.

As a result the Council decided on methodological changes. Since then there has been an integrated package of directives in the area of economic and employment policy. Apart from that, the Stability and Growth Pact has been reformed. The goals of the Lisbon Strategy, above all the endeavor to develop Europe economically, socially, and ecologically in international competition, must be regarded as indispensable. In that connection the call for more liberalization is far from being a cure-all for greater competitiveness. The same applies to wage cuts or the dismantling of workers’ rights. To try to keep pace in a race to the bottom here would be economic and social madness. Europe’s economic future lies elsewhere, namely in the high quality of our infrastructure, our public services, our environment, our social system, our workers, our labor markets and our enterprises.

There certainly exist EU member states whose modernization policies can show great successes. One might mention above all Denmark, Sweden and Finland. The success of our Nordic neighbors is no accident, however. They invest more in education, research and development than Germany or the rest of Europe. Germany does not come out comparatively well in terms of child care either.

It is not for nothing that they have a future-oriented economic and social policy. The total tax and contribution burden in the Nordic countries is large, while Germany is even below the EU average. The high level of redistribution in the Nordic countries appears not to have harmed their economies since they can point to outstanding growth rates.

The clear orientation towards innovation and a knowledge society forms the basis of their competitiveness. Europe should therefore orientate its economic and social policy more strongly on the example of the Nordic countries. Basically the aim should be to offer people in Europe, also in the future, the prospect of social participation and quality jobs, and all this without sacrificing social and environmental standards or consumer protection. This central issue will also determine whether we merely surrender ourselves to globalization or shape it. We therefore have to set the course now and make sure that the cyclical upswing becomes a lasting upswing. This involves support for and integration of research; completion of the internal market; development of »intelligent« growth strategies; flexibilization which is fair to workers and social protection of employment;
as well as better macroeconomic coordination.

In short, we need a more coherent strategy for high-level performance in employment, social solidarity, environmental protection, and research and innovation in order to bring competitiveness and a solidaristic society into harmony in Europe. The Lisbon Strategy has to be more democratic, more goal-directed and more effective. Only in that way can it ultimately be successful. And only in this way can it be ensured that investment in our economic and social potential pays off, not only in the Nordic countries, but with tangible achievements throughout Europe.