Launched on the eve of the European Council meeting, this European Economic Sustainability Index (EESI) has been designed by Fabian Zuleeg to enable a comparison of the long term economic sustainability of EU Member States. The index is constructed using six domains: deficits, national debt, growth, competitiveness, governance & corruption and cost of ageing. Each EU country is simultaneously assessed according to each criterion and then ranked against each other.
Selected findings from the report:
At the top of the ranking are the Scandinavian EU Member States with Estonia as the only New Member State (NMS) in the top group. Northern/central European countries also perform well.
Greece not only comes out bottom, it actually is very close to being the worst performing economy across all six domains of the index. Italy also has significant long-term economic sustainability problems and Portugal is also performing badly. Spain is clearly under threat. As is Ireland, but it is doing significantly better than the lowest performers.
While outperforming the problem countries of the Euro-zone, the NMSs which have required IMF/EU assistance, Hungary, Latvia and Romania, also cluster at the bottom of the ranking. There appears to be no clear relationship between Euro-zone membership and the position in the EESI, indicating that long-term underlying structural factors are more important. While this does not allow a final assessment of the Stability and Growth Pact, it certainly indicates that the SGP is no guarantor for good public finances or long-term growth performance.
Click here for the full report
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