A More Liberal Commission

The new European Commission, set to take charge next November, is different in tone and style from the previous, and more liberal.

Headed by former Portuguese Prime Minister, Jose Manuel Durao Barroso, a new European Commission is scheduled to take office Nov. 1. In an effort to end the economic stagnation that has plagued Europe, the progressive Barroso hopes to steer Europe away from the federalism of the previous Commission and toward free-market, liberal policies.

Βeyond the economy, the European Union' s executive body will confront such thorny issues as foreign policy and the new EU Constitution, but must take a bold stance if it is to sell change to the people of Europe.

The Commission, charged with drafting and implementing EU laws, has faced tough challenges in getting member states to enforce union directives. In a move to overcome obstacles, Barroso has called for a higher commission profile. Many of the new commissioners have extensive experience in the private sector and will work to give more incentives to European industries.

The addition of Dutch commissioner Neelie Kroes in the competition post and Ireland' s Charlie McCreevy - who orchestrated Ireland' s current economic boom- as head of internal markets, bodes well for big business as they will push to make EU businesses more competitive in the international arena. In an effort to stimulate business development, these new commissioners will push to eliminate the red tape and EU obstacles and regulations on companies.

The new Commission will be under great pressure to bring Europe' s economy out of the stagnation and slow growth that has plagued the continent for several years. Ballooning deficit spending and minimal growth are squelching the EU' s hopes of challenging USA' s economic dominance. Barroso has said that he will promote free-market reforms aimed at stimulating European consumer spending, encourage closer examination of ways to rein in government spending and spur European business performance.

On August 20, the European Commission' s president has expressed desire to revive the EU' s Lisbon Strategy, a plan to make Europe the world' s most competitive economy by 2010. The rest of the commission has likewise vowed to implement reforms to improve the European economy. A key area where Europe lags behind the USA is information technology, which must be substantially upgraded if the continent is to mount a challenge to US economic dominance.

The Lisbon Strategy, the most overarching part of the push to improve the EU' s economy, was formulated in 2000 and has mostly lain by the wayside since. Barroso is committed to picking up where the former Portuguese prime minister left off when he served as president of the Council of the EU in 2000. Now he has even less time to see the strategy through to fruition and overcome the gap between Europe and the USA that has grown even further in those four years.

Europe has many problems, but one of the most pressing is the need for improvements in information technology. Especially since the USA' s technological boom in the late 1900s, Europe' s economy has begun to lag behind the USA' s substantially. The USA has used information technology to increase productivity and communication. Europe' s failure to do the same has held a back from achieving similar progress.

As an example of how far Europe is behind the USA, consider statistics on technology. In 2002, the USA had 659 computers for every 1,000 people. In the twelve countries that comprise the eurozone, there were 317 computers for every 1,000. There are an estimated 159 million Internet users in the USA (out of 293 million people). In the eurozone there are 101 million Internet users (out of a population of about 300 million). Technology exports account for 32% of all USA exports, while technology exports for the newly expanded EU will be much less.

All these technological gains have pushed the USA economy to much greater heights. The USA gross domestic product (GDP) is worth about $11.6 trillion for 2004; the 25 EU countries' combined GDP is an estimated $30.8 trillion. More work is done in less time and selling and purchasing products and services is much easier and swifter - which creates higher supplies and higher demands. By the Europeans' own measure, the eurozone is 17% less productive that the USA and many individual countries post even lower rates.

To improve the EU economy, the Lisbon Strategy aims to address areas such as unemployment, mainly by eradicating the economic inefficiencies and labor policies which hinder full employment. Barroso will face economic, cultural and political barriers that will hamper his ability to fully achieve his goal. Economically and culturally, Europe is unlikely to be ready for the reforms; politically, European leaders are unwilling to make potentially unpopular changes.

So, if the Lisbon Strategy is to have any chance of success, Barroso will have to get tough with Europeans and their leaders, to convince them of the benefits of cooperating with his plan. Unfortunately, he has very little time to make Europe' s economy into the world' s most competitive - and he has better move quickly.