Enlargement to Help EU catch U.S. on Productivity
The entry of ten new EU states in May will boost EU productivity to levels only just below that of the U.S., according to a new report by an influential U.S. business group.
A study by the New-York based Conference Board shows that EU productivity growth at 0.8 percent lags far behind the US at 2.6 percent. However, the 10 new member states have far higher productivity growth levels - with an impressive average of 4.2 percent over the last eight years. Productivity growth is a key measure of economic success and a boost in productivity from new member states will go a long way to help the EU fulfil its goal to be "the most competitive, knowledge-based economy in the world by 2010" (the so-called Lisbon Agenda). One of the co-authors of the report, productivity expert Bart van Ark, said, "Productivity growth in the enlarged European Union will be just slightly below U.S. growth rates," adding that "Cost savings on labour and continued restructuring, especially throughout manufacturing" will be the main cause of the gains.