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In trying to analyse the position Europe is in today, one has to take note of the fact that after the devastations of World War II and in the 45 years that have passed since the signing of the Treaty of Rome, Europeans have accomplished great economic success and European integration has made huge strides forward. The European Union will soon consist of 25 member states extending the zone of peace and stability far into the continent, finally repealing an artificial barrier across Europe that had been imposed by the Cold War. In comparison to the USA the European Union is often criticized for being less dynamic and competitive. But let us not forget the fact that Europe places much more importance on values like social security, lower crime rates and a more equal income distribution. Geographic and cultural heterogeneity enriches the Union, but, of course, constitutes a certain obstacle to labour mobility. Coordinating the political decision making process among 25 member states is certainly a more difficult process than in the US with its homogeneous economic and political structures. On the other hand, a major compromise on agricultural issues and structural and cohesion funds was reached at the 2002 Brussels European Council and confirmed at the Copenhagen Council in December 2002. This decision confirmed the ability of the EU member states to resolve important issues in a pragmatic and expedient way. As a result of this breakthrough, enlargement is now within reach. We are approaching a historic event when the division of Europe will finally be overcome and the continent united. The gap between East and West has already become smaller and is about to disappear completely, as we are witnesses to Western and Eastern Europe growing together economically as well as politically. When benchmarking the EU and its member states’ economies, it may not be wise to look too much towards the US, but rather to concentrate on highly successful countries in Europe, like Finland or Ireland. In fact,

Introduction: structural reform and competitiveness – the position and future of an integrated Europe