In Lisbon three years ago European Union countries agreed to undertake a major effort to improve their economic and social strategies with the objective of becoming fully competitive with the United States by the end of the decade. Yesterday the European Commission presented a progress report – and a very mixed picture it revealed. For instance, in the important area of liberalising markets Britain, Denmark and Sweden have achieved good results whereas France, Germany and Italy have lagged behind. Across a range of targets Denmark, Finland and Sweden have performed well, Britain, Ireland, the Netherlands and Spain have also made solid progress but, again, France, Germany and Italy still have much to do.

An analysis of the key challenges facing each country is included in the report. Spain is told that it needs to establish long–term financing for age–related expenditure (pensions, presumably), to reduce unemployment especially of women, and to combat the problems resulting from high inflation combined with low productivity. Britain's main problems are identified as low productivity, the quality of public transport services and high unemployment; the inclusion of ”high unemployment” will raise some eyebrows in the UK but there can be little dount about the need for improvement in productivity and public transport there.

The report awards up to three stars for achievement in three sectors – public finances, labour markets and product markets. Denmark and Sweden score eight out of a possible nine, Britain gets seven, Spain six. But Austria and Germany are at the foot of the table with only four each. Clearly, much remains to be done.