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Dierx, Adriaan; Ilzkovitz, Fabienne --- "Economic Growth in Europe: Pursuing the Lisbon Strategy" [2006] ELECD 114; in Mundschenk, Susanne; Stierle, H. Michael; Stierle-von Schütz, Ulrike; Traistaru-Siedschlag, Iulia (eds), "Competitiveness and Growth in Europe" (Edward Elgar Publishing, 2006)

Book Title: Competitiveness and Growth in Europe

Editor(s): Mundschenk, Susanne; Stierle, H. Michael; Stierle-von Schütz, Ulrike; Traistaru-Siedschlag, Iulia

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845426620

Section: Chapter 2

Section Title: Economic Growth in Europe: Pursuing the Lisbon Strategy

Author(s): Dierx, Adriaan; Ilzkovitz, Fabienne

Number of pages: 32

Extract:

2. Economic Growth in Europe:
Pursuing the Lisbon Strategy
Adriaan Dierx and Fabienne Ilzkovitz*

2.1 INTRODUCTION

The European Union witnessed a slowdown in its real growth from mid-2000
onwards. The main feature of this economic slowdown was not its sharpness
but its duration. There was a gradual but steady widening of the output gap
over the four years from 2000 to 2004. In contrast, over the same period the
US saw a sharp deterioration in the output gap for the first two years but an
improvement thereafter. This discrepancy suggests that the European Union's
relatively weak growth performance is not solely attributable to cyclical
factors but that supply factors have played an important role as well. From
this perspective, making a success of the Lisbon strategy, which aims to
transform the European Union into the most competitive and dynamic
knowledge-based economy in the world while preserving the European social
model, becomes all the more important. The aim of this chapter is to assess
whether the Lisbon strategy is an effective tool to revive economic growth in
the European Union.
The chapter first examines the rationale for the Lisbon strategy, which is
to increase population welfare by raising the growth potential of the
European economy in a sustainable way. The next section explains how a
comprehensive strategy of structural reforms can contribute to stimulating
growth but why possible tensions may exist between the economic, social
and environmental objectives of this strategy. Section 2.4 addresses the
question ...