European Union nations are dragging their heels in their ambitious drive to become the world's most competitive economy by the end of the decade, the European Commission said Wednesday.

The EU's executive agency said Europe is falling further behind the United States after a standstill year in which European job growth evaporated, public finances deteriorated and the average unemployment rate rose to 8.1 percent.

In an annual survey of how the 15 EU nations fare in trying to become economically more dynamic, European Commission President Romano Prodi said governments lack political will to overhaul the continent's economies.

His report lamented a "substantial gap" between Europe and the United States in the ability to rally risk capital and money for research and development, quickly process patent applications and spend generously on information technologies.

Seattle Post-Intelligencer