Governments should be given financial “incentives” to implement economic reforms, the president of the European Council, Herman Van Rompuy, has suggested in a proposal sent to national capitals yesterday.

Van Rompuy’s paper, entitled “A European strategy for growth and jobs”, argues that money from the EU’s research framework programme, structural funds and cohesion funds “should” be offered to member states as a carrot to reform. It says that loans from the European Investment Bank should also be used to provide member states with additional incentives.

Van Rompuy’s paper is intended to stimulate discussion at an extraordinary EU summit on Thursday (11 February) at which government leaders will discuss a ten-year economic reform plan currently being prepared by the European Commission.

The plan, known as Europe 2020, will be presented on 3 March and will replace the Lisbon Strategy, which is generally judged to have produced disappointing results since its launch in 2000.

Van Rompuy says in the paper that the Lisbon Strategy had clear shortcomings. “Without accountability or incentives, implementation is weak,” he wrote.

He argues in the paper that governments that persistently fail to implement Europe 2020 reforms should be subjected to “surveillance instruments” introduced by the Lisbon treaty in December. These allow the Commission to send warnings to countries whose economic policies are not consistent with those agreed at EU level.

Van Rompuy’s paper says that Europe 2020 should concentrate on a maximum of five quantitative targets, with “differentiated” goals for each member state. In the paper, Van Rompuy says that the Lisbon Strategy had a “one-size-fits-all approach” with which “nobody feels comfortable”.

Van Rompuy says that EU leaders should meet before summits of the G20 group of countries to have a “full discussion of the issues at stake”.

He says also that governments should hold regular discussions on “selected policy issues” affecting economic growth, with the first such discussion – “on research, development and innovation” – taking place this autumn.

“Whether it is called co-ordination of policies or economic government, only the European Council is capable of delivering and sustaining a common European strategy for more growth and more jobs,” he wrote.

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