Luxembourg ranks 6th in European economic sustainability index

The think tank European Policy Centre (EPC) has published a new composite index called European economic sustainability index whose object is to measure the sustainability of the European economies, both in the short, medium and long term. According to the EPC, the markets, the press and politicians currently seem to focus too much on the short term, i.e. deficits, the economic slowdown and debt, while the medium and long term challenges behind the debt have receive relatively little attention. However, the ability of European countries to manage challenges ahead, such as national competitiveness, will determine in more detail which economies will be sustainable. The main objective of this composite indicator is therefore to show in what areas the economic sustainability of European countries could be put at stake.
The composite index is built on six categories of indicators which are equi-weighted: public deficits, debt, economic growth, competitiveness, governance and corruption, and eventually the cost of an ageing population. These categories of indicators were selected to reflect a balance between short, medium and long term sustainability.
The 2010 classification is led by Sweden, followed by Denmark and Estonia. Luxembourg occupies the 6^th position together with Germany, and is part of the highly sustainable categorized countries. Belgium occupies the 13th rank and France 15th rank. The classification has also been re-evaluated for 2007 in which Luxembourg was still in 7th position.
A more refined analysis of the results shows that the positions of different countries vary in the six categories. Luxembourg ranks well in five categories. However, in the cost related to the ageing population, Luxembourg is assigned the lowest score in the whole ranking.
The report also delivers an analysis based on a change of weighting in each category. By making long-term 'competitiveness/corruption' more important  (and assigning therefore less importance to the short term "growth/deficit"), Luxembourg ranks 7th and therefore loses 1 rank compared to the equi-weighted ranking. However, putting more weight on the short-term "growth/deficit", Luxembourg gains two positions. Finally, by removing all long-term categories, Luxembourg is ranked 2nd behind Estonia, and one position in front of Bulgaria.