Europe battles to relaunch growth drive

The European Union will this week bid to revive bold plans to modernize the continent's stuttering economy, but a Brussels summit risks being clouded by testy discord over key reform plans. EU leaders gather Tuesday and Wednesday for the EU's traditional spring summit, which this year comes at the half-way point of a project launched in 2000 aimed at making Europe the world's most competitive economy by 2010.
That central target of the so-called Lisbon Agenda launched in Portugal at the height of the dot.com bubble has been all but ditched as Europe battles to recover from the prolonged slowdown triggered when the bubble burst.
Europe's economic gloom was underlined this month when the European Central Bank cut its forecast for eurozone economic growth to 1.6 percent for this year compared for example to 3.6 percent in the United States.
EU heavyweights Germany and France are at the heart of the doldrums, with unemployment at over 10 percent in both countries Germany's hit a new post-war high last month of 12.6 percent.
But European Commission chief Jose Manuel Barroso, a former Portuguese prime minister, insists that the Lisbon program can be revived, although stressing that it must be stripped down to avoid it running into the sand again.
"The overall Lisbon goals were right, but the implementation was poor. The lesson from the last five years is that we must re-focus this agenda to deliver results," Barroso said of his proposals to streamline the Lisbon plans.
"The real issue is not about facts and figures on paper. It is about their impact on peoples lives: how we pay for our education, pensions, social services and health care," he added.
Indeed, giving priority to such personal welfare concerns otherwise known as preserving Europe's "social model" is at the heart of the debate about economic reform in the EU.
And strains have crystallised ahead of this week's summit notably around plans to free up Europe's vast services sector, notably to make it easier for companies to offer services across borders in the 25-member bloc.
Experts say such reforms, in a sector which accounts for some 70 percent of the continent's overall GDP, will spur competition and create millions of jobs.
But critics, notably EU heavyweights France and Germany, fear the loss of jobs in their countries if companies in the mostly cheaper EU newcomer states in central Europe are allowed to compete openly with them.