The European Council adopted bold strategic objectives for the economy of the European Union at its summit meeting in Lisbon in 2000. The Council aimed to achieve nothing less than the world's most innovative and dynamic knowledge-based economy within a decade, that is to say by 2010.

The adoption of clear and ambitious objectives made sense to the extent that it gave focus and direction to EU policy-making. Moreover, the authors of the Lisbon agenda were acting on the assumption – appropriate under the circumstances – that the achievement of a dynamic economy was a precondition for the successful carrying-out of the sweeping political transformation of the Union then underway.

This transformation includes the enlargement of the Union from fifteen to up to twenty-seven countries, and the political and institutional reorganization of the Union, including a new constitution that will modify the original founding treaties. This will take place through an intergovernmental conference on the basis of the preparatory work being done by the European Convention on the Future of Europe.

As such, the political landscape of the European Union is on the verge of profound transformation. The result will likely be significant economic change throughout the Union, bringing political conflict among member states in its wake. The opening of the EU to new member states in the East will result, in the short term, in lower per capita income and a higher proportion of the Union's population engaged in agriculture.