On the eve of a European summit, the Eurochambers business lobby says the U.S. reached the current EU rate of GDP per capita in 1985
The EU is 22 years behind the US on economic growth according to a new study, with several other economic indicators showing further gaps despite Europe's ambitious reform agenda to be praised by leaders at this week's summit.
A report by Eurochambers, the Brussels-based business lobby, published on Monday (5 March) argues that the US reached the current EU rate of GDP per capita in 1985 and its levels in employment and research investment almost 30 years ago.
Economic growth, jobs and innovation feature as top priorities of the so-called Lisbon Agenda - agreed by EU leaders in 2000 - with the original aim for Europe to become the most competitive economy by 2010 and with the US seen as its key competitor.
However, according to the Eurochambers study, the EU time lag behind the US has expanded further since 2003 when the group published its first report comparing the economic indicators on both sides of the Atlantic.
Part of the reason is that the previous analysis was based on figures from the "old" EU member states while countries that joined in 2004 record quite significant growth rates but worse figures on employment and mainly on investment in knowledge economies.
Authors of the study point out that if calculations included the latest newcomers of Bulgaria and Romania, the gap between the EU and US would be even larger, adding "The European Council must take the size of this lag into account when making its decisions."
This week's gathering of the European Council - heads of states and governments plus the European Commission president - is expected to conclude that the Lisbon strategy "is beginning to deliver results" according to draft summit conclusions.
The document highlights "7 million new jobs created during the 2007/2008 period, leading to a potential increase in the employment rate from just under 64 percent in 2005 to nearly 66 percent by 2008 and a falling unemployment rate" in the EU.
However, in a bid to start catching up with the US on key Lisbon indicators, Europe would have to perform better than the States, according to the Eurochambers study, while the latest results show the opposite: in 2006, the US registered an average GDP growth of 3.3 percent and the EU about 2.9 percent, the highest since 2000.
"If income (GDP per capita) would grow in the US at 2 percent per year and in the EU at 3 percent per year, meaning a 1 percent higher growth of the EU, the EU would catch up with the US around 2045" the authors of the report concluded.