The European Commission president, Mr Jose Manuel Barroso, has described the EU's internal market as "the Union's primary tool" for boosting economic growth and identified Mr Charlie McCreevy's efforts to open up Europe's market in services as key to the continent's success.

Addressing the annual meeting of the World Economic Forum in Davos, Mr Barroso acknowledged that the first five year's of the EU's Lisbon Agenda, aimed at making Europe the most competitive economy in the world by 2010, have been disappointing.

He said that the reform programmed needed to become more focused, with clearer demarcation of responsibilities within the EU.

"The aims are correct, but the strategy is weak; the goal is right, but the implementation is poor. When everything is a priority, nothing is a priority and when everyone is responsible, no one is responsible," he said.

The Commission is due to approve a review of the Lisbon Agenda on Wednesday, when it is expected to recommend a greater focus on economic growth than on the plan's two other pillars of social cohesion and sustainable development.

Mr Barroso said that effective social welfare and environmental protection were only possible with dynamic growth but stressed that the economy existed to serve people rather than the other way around.

"The challenge is to balance a productive economy with social welfare. The real issue is not the numbers on the page, but their impact on people's lives. Too many people who want a job cannot find one. There is widespread denial of opportunity, particularly to women and young people. We want to help citizens reconcile what they know and like from the past and what they hope for the future," he said.

Mr Barroso said that the EU's single market in goods was already working successfully but that Europe could not fulfil its growth potential until providers of services were also free to trade throughout the EU without confronting obstacles imposed by national governments.

Mr McCreevy hopes to introduce a revised version of the EU Services Directive, which would open up the market for services, later this year.

The directive, which was first proposed by Mr McCreevy's predecessor as Internal Market Commission, Mr Frits Bolkestein, has faced fierce criticism from trade unions and centre-left politicians, who fear it could undermine workers' rights.