Aliki Mouriki
employment levels are still very high and rising (8.3% in 2007, 11.3% in 2008, the highest in the EU),
the current accounts deficit is constantly growing (9.5% of GDP in 2008), labour productivity is low,
inflation rate is high and persistent, whilst household and business debt is soaring , R&D spending
remains just above 1.1% of GDP (2005 figures), the productive sector is still largely dominated by
traditionally low-tech, low value-added sectors and a large share of GDP growth is attributed to the
volatile tourist industry and an over-sized construction sector. In Spain too, the Global Competitive-
ness Index (GCI) has fallen, though not as dramatically as in Greece, from the 23rd position in 2004
to the 29th position in 2008.
The Netherlands was successful in avoiding sliding from the core towards the semi-periphery in
the 1970s largely through consensus based policy innovations, and by continually revising its model
of liberal corporatism to create a new ‘Dutch Miracle’, albeit one largely based on wage flexibility
through atypical employment, particularly part-time work (Kleinknecht, 2002). At present, the Dutch
economy has sound public finances with a budget as well as a current accounts surplus, high annual
GDP growth rates until recently (3.5% in 2007 but estimated to slowdown in 2009), the lowest level
of unemployment in the EU (2.6% in 2008), a low inflation rate, R&D spending standing close to
the EU average at 1.8% of GDP (2005), and an overall favourable business environment. As a result,
it ranks amongst the strongest and more competitive economies, not only in Europe, but also in the
world: the Netherlands rank in the 4th position among the EU-27 countries and in the 8th position in
the Global Competitiveness Index in 2008 (an improvement of 4 positions as compared to 2004).
However, the Dutch economy is being deeply affected by the current financial and economic crisis.
According to the latest Central Planning Bureau’s estimates, the prospects for 2009 and 2010 are
bleak: unemployment is expected to rise to 5.5% in 2009 and 8.7% in 2010 (from a low 3.8% in 2008),
whilst general government deficit is expected to record a 5.6% deficit by 2010 (from a 1% surplus in
2008); accordingly, GDP growth rate will fall by 3.5% in 2009 and a further 0.25% in 2010.
Denmark is the best performing EU economy at the world scale, ranking in the 3rd position of
the 2008 Global Competitiveness Index, just behind the USA and Switzerland. Its successful mac-
roeconomic record is illustrated by its budget and current accounts surpluses, very low unemploy-
ment levels that had fallen to a record low of 3.3% in 2008, low inflation, an impressive rate of R&D
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