IN A hopeful spring at the turn of the century, the leaders of Europe met in Lisbon to set themselves a series of ambitious goals for economic reform. They pledged to ignite a decade-long process of change and renewal that would transform the continent’s economic performance, boost its growth, and make Europe “the world’s most competitive and dynamic knowledge-based economy”.

Almost five years later, the premiers and presidents will gather again at a summit in Brussels on Friday. But they will receive a damning report on their progress, which will make a bonfire of their vanities.

The assessment, drafted at the leaders’ behest by Wim Kok, the former Prime Minister of the Netherlands, will roundly condemn the so-called Lisbon agenda, making clear that, while long on hubris, it has been short on achievements.

The report is expected to label the Lisbon initiative as a “a synonym for missed objectives and failed promises”. Mr Kok will lay the blame for the lack of progress, nearly half-way through the ten-year effort, firmly before the leaders. He will say that “progress to date has been inadequate largely due to lack of commitment and political will”, according to leaked copy of his analysis.

The Dutchman is far from alone in his perception that the Lisbon process has been a damp squib. Merely to describe it as a process or agenda is to invest it with an unjustified implication of action. Better, perhaps, to refer to the Lisbon Lethargy. Romano Prodi, the outgoing President of the European Commission, described it last week as “a big failure”.

The Centre for European Reform, the influential London-based think-tank said this year that even Lisbon’s most enthusiastic proponents “can only describe the (European Union’s) performance . . . as mediocre”.

As they convene in Brussels, Europe’s leaders have growing cause to rue their failure to do much more, much sooner, to push their countries’ economic performance into a higher gear.

The eurozone’s economic revival has been a low-temperature affair, with growth struggling to reach even a lacklustre 2 per cent this year. The recovery is stuttering. It has failed to spark the stronger domestic demand that might rekindle a more potent and sustained expansion, and remains dangerously reliant on foreign fuel.

In the second quarter, eurozone growth remained modest at 0.5 per cent. More worrying, four-fifths of this growth was derived from net exports. Eurozone consumers contributed only 0.1 percentage points to the insipid growth rate, with governments’ activities adding another 0.1 points. A rundown of stocks by companies subtracted 0.1 of a percentage point.

Leading forecasters expect that weakening global demand will further brake the eurozone’s expansion through the second half of the year. The best of the present upturn might already lie behind Europe.

Goldman Sachs believes eurozone growth will slow to as little as 0.3 per cent in the third quarter, and may be as meagre as 1.8 per cent over the year as a whole.

The risks to Europe’s recovery from the waning momentum of the global economy are steadily mounting.

The surge in oil prices has taken a substantial toll of world activity. In the US, last Friday’s first estimate of 3.7 per cent third-quarter growth disappointed hopes of a sharp acceleration in growth to an annual pace of more than 4 per cent. While last week’s decision by China’s authorities to raise interest rates for the first time in nine years was a reminder of its Government’s determination to curb the country’s break-neck growth.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts