Policies for Promoting Competitiveness in Eastern and Central Europe in the Context of the Europe 2020 Strategy

Abstract

The present paper aims to identify the competitiveness gap between ten Eastern and Central European (ECE) countries and effective measures for bridging this gap. We find that Romania and Bulgaria are far behind the European countries that joined the European Union (EU) in 2004 in terms of competitiveness. Moreover, since the adhesion year, Romania and Bulgaria competitiveness improved very slowly, while other European countries accelerated their growth in terms of competitiveness. For this reason, the living standard of Romanians and Bulgarians increased very little compared to the increases in the rest of the ECE countries. For proving that increasing competitiveness drives an increase in GDP per capita, we also identify the gap between the actual GDP per capita and the potential GDP per capita if each of the analysed countries would apply the European Commission recommended measures for boosting competitiveness, as described in the Europe 2020 Strategy. We conclude that, unless harsh measures are imposed for increasing competitiveness, Romania and Bulgaria risk to remain far behind the rest of the analyzed countries. In this respect, we propose public policies actions based on other ECE countries good practices focused on the domains Romania and Bulgaria must improve.