Marius-Jan Radlo INTRODUCTION The Lisbon Strategy was accepted in March 2000 and became the most comprehensive growth-supporting economic programme in the history of the EU, covering reforms in several areas, including product and labour markets, research and development, investment in human capital, improving the business environment, social security systems and the like. The strategy started at the same time as the European Union entered into the final stage of its eastern enlargement and it has meant that economic reforms are another fundamental challenge- alongside enlargement-to be faced by the Union. The initial aim of the Lisbon Process was to make the Union“ the most competitive and dynamic knowledge-based economy in the world” by 2010. Nonetheless, a few years after its adoption, right after enlargement, the strategy did not seem to have been a success. There were many weaknesses in the strategy that were identified early on. Among the most commonly indicated were that there was too wide a range of inconsistent priorities resulting in a lack of clear priorities; soft methods of implementation resulting in a lack of implementation; and the omission or watering down of guidelines as to how desirable reforms were to be implemented. The strategy's shortcomings caused the EU leaders to launch a mid-term review and to renew the strategy in early 2005. As a result, at present, the Lisbon Process is anchored among the main instruments of the economic policy coordination system in the European Union aimed at fostering structural and regulatory reforms in member states. It also concerns not only 15 member states, as in the first stage of the Lisbon Process, but 25. The accession countries, such as Croatia, while encouraged, are not obliged to take part in the Lisbon Process. However, it is useful for these countries to study the successes and failures of the European Union in fostering structural“Lisbon” reforms. Such a critical study seems to be essential for those looking for economic policy guidelines that can help to manage the transition to the market economy and becoming a part of the single market. From this perspective, adjustment to EU requirements, as stipulated in the Copenhagen criteria or the acquis communautaire, can only partially serve as a good guideline. The inefficiencies of some of the European social and economic models as well as the failures of the Lisbon Process show that accession countries, when trying to adjust their economic models to those of the EU, should go beyond the current European status quo in order to avoid falling into the trap of Eurosclerosis. Critical assessment of the Lisbon reforms enables us to look at the Union and the adjustment process without rosy glasses, because not only do the transition-accession countries need to reform their economies but 76