BRUSSELS - The European Union executive will unveil a 10-year plan on Wednesday to boost economic growth, create jobs and help steer the bloc safely out of its worst financial crisis in decades.

The Europe 2020 strategy succeeds the European Commission's Lisbon Agenda, which failed to achieve its goal of making the EU the world's most dynamic and competitive knowledge-based economy by 2010.

The Commission is setting its sights lower this time but already faces criticism, including from Germany, of a plan that is central to the EU's efforts to strengthen economic governance and stay relevant on the world stage.

Either we continue at a slow and largely uncoordinated pace of reforms, and we risk ending with a permanent loss in wealth, a sluggish growth rate, high levels of unemployment and social distress, and a relative decline on the world scene, the Commission said, according to a draft copy of the plan.

Or we face up collectively to the immediate challenge of the recovery and to long-term challenges -- globalisation, pressure on resources, ageing, technological progress -- so as to make up for the recent losses and put the EU on an upward path of prosperity.

The plan aims to increase employment from 69 percent to 75 percent of the EU workforce and increase investment in research and development from 1.9 percent to 3 percent of EU gross domestic product.

Harmful carbon dioxide emissions should be cut by 20 percent compared with 1990 levels and the share of renewable energy sources in final energy consumption should rise to 20 percent. Energy consumption should fall by 20 percent.

Targets for economic expansion have not yet been agreed but the broad aim is expected to be a doubling of Europe's annual growth potential to 2 percent.

SURVEILLANCE MEASURES
One of the main challenges will be ensuring the 27 EU member states meet national targets that will be agreed once the overall plan is approved. The aim is partly to prevent another fiscal crisis such as the one faced by Greece.

The Commission has made clear it will not back calls by EU president Spain for corrective measures for states that do not comply but has signalled it will introduce country surveillance measures to monitor compliance.

German Chancellor Angela Merkel has written to European Commission President Jose Manuel Barroso to express her government's concerns, which could slow the plan's progress,

In the letter, seen by Reuters, she said a proposal to link surveillance closely to adherence to targets in the EU Stability and Growth Pact could make the process very political.

She called for fewer targets to be set and said proof would be required that they were attainable.

The Commission hopes EU leaders will endorse the strategy at a summit on March 25 and 26. Final approval is expected in mid-June.

The Commission says the plan will strengthen policy coordination and economic governance. One official said it would help ensure the EU is not condemned to ... less relevance as emerging powers such as China come to the fore.

The plan seeks smart, green and inclusive growth to give the EU an innovative, competitive and high-employment economy. Areas targeted for boosting growth and employment include education, research and development, a Digital Agenda for Europe and a European Platform Against Poverty.

Critics say the plan is unnecessary and question whether member states that lacked commitment to the Lisbon Agenda have the political will to implement the 2020 strategy fully.
Others are bemused by the idea of setting a 10-year project harking back to Soviet-era central planning.

(Editing by Andrew Dobbie)

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