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MARCH 2007

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Golden Future?

Within Europe's growing circle of stars,
some shine brighter than others.

Click the image above for a full-sized chart.

he European Union celebrates its golden anniversary in 2007. Unlike most marriages, the partners have shifted and multiplied during those 50 years, and that makes some parties uneasy when it comes to corporate project attraction, economic development and work- force issues.
   In Europe, the economic center is shifting eastward along with EU membership, which as of January 1 welcomed Romania and Bulgaria to total 27 countries, with Turkey waiting in the wings. Also in January, the EU released its 2007- 2013 plan guiding available project incentives and aid in member countries. These rules continue to offer maximum aid in many eastern European countries which, to some observers, already seem firmly grounded in new industrial development. Romania will see total funds of 32 billion euros (US$41 billion) between now and 2013.
   The Czech Republic and Slovakia, despite seeing so much investment from the automotive industry, are seeing nearly 90 percent of their populations eligible for regional aid. Hungary, which many corporations are finding an apt central European location for serving all of the EU and EMEA territories, is seeing 100 percent of its population eligible for regional aid. Meanwhile, the original EU- 15 are seeing a cumulative 33 percent of their populations eligible.
   Nevertheless, "old Europe" continues to help lead the world in innovation. A January report from Paris- based business school INSEAD, "The World Business/INSEAD Innovation Index 2007," found Germany, the U.K. and France taking spots No. 2, 3 and 5 in the rankings, with the U.S. No. 1 and Japan No. 4. The rankings took into account institutions and policies; infrastructure; human capacity; technological sophistication; and business markets and capital; and nations' knowledge competitiveness and wealth.
   At the same time, November 2006 statistics from Eurostat, the statistical office of the EU, found that, compared to the same month a year earlier, total manufacturing working on orders rose in 17 member states, and fell only in Ireland (- 16.3 percent). The highest increases were registered in Poland (+41 percent), Latvia (+31.5 percent) and Slovakia (+28.7 percent).
   Both of the above developments color parting comments by EU Trade Commissioner Peter Mandelson in a January speech in Amsterdam, delivered in the nation where the path to a European constitution hit an abrupt detour two years ago:
   "Some in Europe see the European Union, especially an enlarging European Union, as globalization's Trojan Horse, eroding the independence and identities of individual states," he said. "Others see the EU as a regional irrelevance in a global age, as if it is simply enough for nation states to play harder on an international stage. Both are wrong. The European Union is Europe's best response to globalization. It is where we find the collective weight to shape global change. It is by combining our strength[s] where we can that we declare our independence as Europeans."

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