Single market, competition & trade

At the 'dot.com' Summit AT Lisbon in March 2000, the EU set itself the strategic goal of creating full employment in a competitive and inclusive knowledge-based economy.

The paradox of trade policy is that, at a time when political leaders in most parts of the world have accepted the intellectual case for trade liberalisation more thoroughly than ever before, public opposition to free trade is on the rise.

The collapse of the Seattle meeting of the World Trade Organisation in December 1999 was a blow to the EU, which had first proposed the idea of a "millennium round" of trade liberalisation.

The European Union's political leaders have great ambitions for the years ahead: a successful economic and monetary union, a coherent and effective foreign policy, and the accession of up to 12 new member-states.

The prospect of a two-tier Europe, with Britain outside the core, causes alarm in Downing Street. Joschka Fischer's vision of a European federation - with a group of more ambitious states forming its vanguard - is the latest such proposition, albeit one for the long-term. But does Tony Blair have much to fear?

Slowly, and somewhat reluctantly, the EU is beginning to embrace economic reform. For years America's equity-orientated, shareholder-value-driven economic model appeared anathema to much of the continent.

Europe's citizens, generally speaking, do not want their taxes set by Brussels. Taxation and representation still go hand in hand. So it is safe to assume that so long as people continue to look to their national governments to represent their interests (and turn out to vote for their national politicians in greater numbers than for MEPs), they will reject the notion of taxation policies being decided at European Union level.

Europe needs a new economic story. Its ability to compete in the knowledge-driven economy depends on how well it can translate science, technology and know-how into jobs, growth and economic success.

Europe needs a new economic story because it faces a new economic challenge. The challenge is to transform European science and technology, knowledge and creativity, into jobs, growth and economic success.