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Europe 2020 – A New Strategic Fantasy?

Author

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  • Jože Mencinger

    (University of Ljubljana)

Abstract

Modern societies are preoccupied with efficiency and economic growth; the EU concentrated this preoccupation in Lisbon strategy of 2000. It should turn Europe into the most efficient knowledge based economy. Growth was to be achieved by increased competitiveness assisted by globalization. In 2005, the “old” strategy was replaced by a "renewed" one. The "scientific" pillar of both strategies was production function while their Achilles’ heel was total negligence of aggregate demand. In 2010, the two failed strategies were replaced by Europe 2020. According to it, the EU should become a smart, sustainable and inclusive economy. Europe 2020 is a slightly more realistic plan than the predecessors but nevertheless a kind of pre election program with a lot of promises, newly invented expressions, and empty slogans; the demand side is again ignored. Therefore, Europe 2020 will most likely soon turn to a worthless political document providing speech-making and jobs for the EU bureaucracy responsible for its "implementation". The negligence of the demand side is however much more fateful in actual economic policies which insist on the assumption that excessive public expenditures is to be blamed for the crisis and try to heel it by hysteric savings. In reality, the crisis was created by long lasting redistribution of GDP, hyper production, creation of demand by credits, and financial speculations. Public sector became "excessive" because governments had to prevent financial collapse created by private sector. Steadiness on current economic policies and savings hysterics therefore do not threaten only the Europe 2020, they threaten the sole existence of the EU. Euro, for many years the most prestigious element of European unification turned to its threat, as well.

Suggested Citation

  • Jože Mencinger, 2012. "Europe 2020 – A New Strategic Fantasy?," Serbian Association of Economists Journal, SAE - Serbian Association of Economists, issue 5-6, pages 217-228, August.
  • Handle: RePEc:srb:journl:y:2012:i:5-6:p:217-228
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    More about this item

    Keywords

    economic growth; production function; technological change; globalization; EU; euro; monetary union; iscal union; aggregate demand;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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