"We Aren't Even Halfway There"

Europe should be getting a collective red face. The recently concluded 4th Munich Economic Summit delivered a damning assessment of progress towards achieving the grandiloquent goals set by the so-called Lisbon Strategy. Formulated five years ago, the strategy aimed at turning Europe into the world's most competitive, dynamic knowledge-based economy by 2010. But, as Bavaria's Premier Edmund Stoiber eloquently put it, "We promised ourselves a moon landing by 2010. Now, five years on, we do not even have a rocket yet."

The nearly 130 high-ranking participants heartily concurred. Following hard on the heels of the twin Noes to the EU Constitution delivered by France and the Netherlands, the annual Munich Economic Summit —organised jointly by the BMW Foundation Herbert Quandt and the CESifo Group Munich— offered a superb chance for decision-makers from the world of politics and business, renowned economists and media chiefs to discuss the current state of the union and the possible effects of the French and Dutch constitutional rebukes.

The first part of the conference examined possible approaches to speed up the stalled Lisbon process. The greatest obstacle appeared to be the fact the while the Strategy's goals were formulated as European in nature, it was left to the individual governments to implement the necessary reforms to achieve them. And this is where a lack of will or ability is most evident.

In addition, many directives from Brussels seem to hinder job creation by establishing onerous guidelines —such as those regarding working hours or the minimum share of women in gainful employment. One of the speakers even suggested that Brussels should simply stop issuing further directives and concentrate only on measures geared at stimulating employment and economic growth.

The second part delved into the advantages or disadvantages of promoting national or European champions, in order to ensure the availability of strategic industrial capacity or to provide employment. Inevitably, the case of Airbus came to the fore. Sure, some said, government support ensured that such a world-beater as Airbus came into existence, sustaining a large pan-European high-tech industrial base and thousands of people employed to boot. Why not extend this to other suitable industries?

Well, not so fast, came the warning from other quarters. You cannot generalise: the aeronautical industry is a special case. Its high fixed cost, low product differentiation, market entry requiring focus and commitment, all make it different from other industries. Attempting to create an Airbus-like national champion in computer manufacture, for instance, would be a disaster.

Still, good arguments were put forward for supporting certain other industries, where the creation of markets is a pivotal element.

The Summit is also quickly establishing itself as a forum of choice for eastern European countries to air their views to a discriminating crowd, offering the chance for a rich exchange with their western counterparts. And, in no small measure, for the western countries to learn from their eastern cousins. That was most evident in a heartfelt speech delivered by Vaira Vike-Freiberga, the President of Latvia, during a gala dinner at the Munich Residence. There, she reminded the audience of what Europe has accomplished, of all those things Europe can be proud of, of the enormous meaning for her country of the changes of the past decade and a half, not least EU accession: "I hope that our dream will remain a reality".

No poet could have put it better.

• Read all speeches delivered at the Summit
• Visit the official Munich Economic Summit website