Mr José Manuel Barroso bluntly amended the priorities, targets and expectations laid down in the European Union's strategy for economic growth and competitiveness in his address to the European Parliament yesterday.
The objective for the EU to become the most competitive economic region in the world, laid down at a summit in Lisbon five years ago, is quietly set aside as unrealistic. Economic growth, competitiveness and structural reform are given clear priority over social cohesion and environmental sustainability. Fresh emphasis is put on the European Commission's role as a partner with the member-states, recognising that they must implement the reforms required in such areas as pensions, labour markets and research if the strategy is to succeed.
These changes are all in line with Mr Barroso's centre-right political lineage and support base among the national leaders who chose him. Although the Commission does not "own" the Lisbon process, which was laid down by the heads of state and government and relies on national capitals to put it in place, it does have a recognised leadership role. By choosing economic reform and growth as the main themes of his five-year term, Mr Barroso has provided a narrower and more realistic focus for a process which has become much too unwieldy and broad-ranging compared to the inter-governmental mechanisms available to implement it. Unless the member-states co-operate it cannot work.
Mr Barroso's hope that governments will appoint ministers responsible for overseeing agreed reforms has merit if it helps to make the process more coherent. But the governments have shied away from taking action because they know that changes in pensions, labour markets and services are unpopular and could rebound on them electorally. The large member-states are the key ones, since reforms there will best encourage continental-scale growth. That is why the latest round of changes in Germany, France and Britain are relevant to overall growth and employment rates in the EU. Mr Gerhard Schröder has apparently gained support from German public opinion for sticking with his reform programme. The centre-right majority in France is introducing unpopular amendments to the 35-hour week.
Changes in the Lisbon process are related to reforms in the Stability and Growth Pact intended to make it more sensitive to economic cycles. The EU also has a major budgetary negotiation in train this year for the 2007-13 period. Mr Barroso has an opportunity to relate these reforms to each other and to act as a catalyst between the Commission and member-states. This would establish a new equilibrium for him at the beginning of his term, which he needs to do after his difficult start in office with the European Parliament. He can build on sectoral strengths throughout the EU economy and on a solid record of productivity and exports. But he must also find a new equilibrium between growth, cohesion and sustainability if he is to carry the centre-left with him.