Denmark is the most competitive economy as measured by the European Union's Lisbon criteria, according to the World Economic Forum (WEF). Runners-up are Finland, Sweden, the Netherlands and Germany.

The review is the third in a biennial series that assesses the progress made by the EU member countries in the far-reaching goals of the EU's Lisbon Strategy of economic and structural reforms, the last of which was published in 2004. It also measures the competitive performance of the countries on the waiting list to join in coming years.

Among candidate countries, Bulgaria and Romania, which will join the EU in January 2007, were found to be lagging behind Croatia and Turkey, two countries with no foreseen entry date.

What is perhaps even more remarkable is that both Croatia and Turkey score higher overall than Poland, a present EU member.

Several May 2004 accession countries have improved their comparative performance since 2004, putting them ahead of many longer-standing EU members, including Estonia, Slovenia and Hungary (ranked 12th, 16th and 17th, respectively).

"In 2000, the EU set itself ambitious action and development plan with the Lisbon Agenda. With the Lisbon Review, we aim to measure Europe's progress towards meeting its own criteria," said Jennifer Blanke, senior economist at WEF's Global Competitiveness Network.

"The assessment indicates that EU attention should be focused on three areas," said Blanke. "Improving the environment for innovation and research & development, developing a stronger information society and creating an enterprise environment that is more conducive for private sector economic activity."