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Economic reform working group - Brussels

  • Date(s)
    16 July 2004
  • Location

The Role of the Public Sector within the Lisbon agenda

The second half of the meeting looked at the role of public sector in the Lisbon Agenda.  The discussion opened with a presentation on how those countries who are scoring best on the basis of Lisbon criteria are also those with the largest public sector.  It was suggested that therefore the very different size of the public sector according to the States could be seen as a reason for low competitiveness and that closer analysis of these countries needs to be done. In the same time, public services are changing in function of the new expectations of citizens. But in any case, openness of the public sector, democratic control and the citizen’s freedom to choose and influence are fundamental features of the quality of public service.

The group were in agreement that performance was a key government objective as they seek to deliver public services, but that this hasn’t necessarily been matched with budget increases. Some of  important questions raised included:
- Which services do you offer?  Citizens want value for money so government’s are under pressure to make structural decisions to reflect this.
- To what extent is competitiveness in countries a result of public spending, or is it because they are competitive that they can afford high levels of public expenditure?
The discussion then moved to the issue of national and EU ‘champions’ which can be result of intervention of public authorities or they may emerge from competition within the market.

An issue which isn’t being tackled in Europe is that of the nationality of firms.  The point was raised that in the UK the location of activity is more relevant than the location of the headquarters, but that in the France and German situations, it is the nationality of the company that is more important. Clearly, this has an impact on the development of an active industrial policy at a European level. Obviously, there are certain sectors of industry where governments feel a responsibility to intervene, such as defence and security.

Linked to all of this discussion of where companies locate and how European countries overcome the loss of so-called ‘champions’ is the need to look at how companies make decisions.  This would involve some analysis of public sector factors (education, transport) which are part of the decision-making process.

The final part of the meeting focused on what needs to be done to politically sell Lisbon to the rest of Europe.  There is a need for better internal organisation to regenerate momentum for the reform agenda.  This would involve taking into account new sectors within the European economy and looking at how Europe can promote growth.  An example of this was the growth from the SME sector (as compared with that of the large company sector) which may benefit more from European promotion of cultural characteristics.

The meeting concluded that the issue of competition in public sector is something worth discussing in terms of what type of competition brings efficiency in the public sector and what sort of system needs to be put in place to enhance the quality and value of the public sector.

As a result of the series of working group meetings on economic reform, Policy Network has published a pamphlet called Economic Reform in Europe: Priorities for the next five years, edited by Roger Liddle and Maria Joao Rodrigues.

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