The second edition of our annual European Growth and Jobs Monitor, which measures progress in the Lisbon process, shows sharp improvements in most countries. Eleven of the EU’s largest economies are well-placed to meet the Lisbon targets. Finland and Ireland rank Nos. 1 and 2; Austria, France and Italy lag; UK and Germany most improved; Netherlands suffers steep downgrade. Productivity growth in 11 European countries is now rising faster than in US. We have extended the group of countries analysed from the nine largest EU economies in our last Monitor to the fourteen largest this time round. What is more, the highly charged nature of the debate on climate change has prompted us to include a special section in this paper entitled “Energy efficiency – a key driver of growth”.

In addition to our annual European Growth and Jobs Monitor, which measures the progress made with respect to the Lisbon Process, we plan, from now on, to highlight what we believe to be particularly promising growth drivers in another annual feature. This time, the growth driver in question is infrastructure investment.

Allianz SE and the Lisbon Council, a Brussels-based think tank, have released the “European Growth and Jobs Monitor”, a new, leading-edge ranking on indicators for success in the knowledge economy. The report shows that the nine largest EU economies are reaping the benefits of reforms. Productivity in some European countries meanwhile is rising faster than in the U.S. Sweden ranks No. 1; Belgium most improved, but Germany also scores well; France and Italy lag behind.

In no other world region does the commodity oil play such a dominant role as on the Persian Gulf. With the oil they exported in 2004 the Gulf states could satisfy Europe’s entire oil consumption. Their pre-eminent position is further underpinned by their formidable oil reserves, which make up almost 45 % of all known oil deposits. What is more, production costs are extremely low in comparison to other oil-producing regions. And what does the future hold? We present three scenarios.

According to the Dresdner Bank, the 2006 soccer World Cup is set to ensure a tourism boom in Germany. Tourism revenue will rise by around 7 percent on a year earlier to EUR 25bn, according to the bank’s economists in their latest travel report presented at the CMT (Tourism Fair) in Stuttgart. “By the end of this year Germany will have seen tourism revenue rise by around 25 percent since 2003“, according to Hans-Peter Muntzke, tourism expert at the Dresdner Bank. This makes Germany the fifth most popular tourist destination in the world behind the USA, Spain, France and Italy.

The economists at Allianz and Dresdner Bank have updated and released the trusty Investment Guide for Central and Eastern Europe.

The structure of global energy supply will change fundamentally over the coming decades. The importance of renewable energies will increase. This transformation will be driven by a sharp rise in prices for dwindling fossile fuels. On top of this comes climate damage, which is already placing limits on the use of oil and coal as a source of energy. Problems on the energy front can only be solved by expanding the use of environment-friendly sources of energy and by more efficient energy production and usage.

Two important initiatives are on this year’s political agenda: the revitalization of the Lisbon Strategy and the reform of the Stability and Growth Pact. Fiscal policies in line with stability are easier to implement in a strong economy, and both issues are important in determining the international role of the euro.

In the coming decades fluctuations in savings and investment patterns will have a marked impact on the capital markets and the trend in yields. However, there will be other factors curbing the swings.

Against the backdrop of foreseeable demographic changes, reform of the health system is urgently needed. Basically, the same applies as in the case of pensions – the best insurance against demographically-related spending increases is a greater emphasis on capital funding. But, despite all the difficulties, the rosy outlook for the health market in the long tem should not be forgotten.

Some 15 years after the fall of the Iron Curtain, eight central and eastern European countries, plus Cyprus and Malta, are set to join the European Union in May 2004. In this report we examine the prospects for the enlarged EU, the financial framework up to 2006, the outlook for the individual accession countries and their path to monetary union.

The introduction of pension reform and the so-called Riester pension in 2001 was merely a first step towards overhauling the pension system. The reform was soon followed by disenchantment. High unemployment, for instance, is making it increasingly difficult to fund pensions. However, the greatest single risk lies in demographic trends. For this reason, there is no alternative but to build up funded pension provision.