Mr Romano Prodi, the outgoing European Commission president, has labelled Europe's efforts to overtake the US as the world's most competitive economy "a big failure".
His comments came as Mr Wim Kok, the former Dutch prime minister, prepared to deliver a scathing report on Europe's economic reforms, in which he will criticise a lack of commitment and political will and warn they risk becoming "a synonym for missed objectives and failed promises".
Mr Kok's report warns that Europe has fallen further behind the US since launching its ambitious target to raise Europe's growth potential at Lisbon in 2000.
It proposes the EU concentrate on 14 indicators to measure progress towards the goals it set at the Lisbon summit, focusing on jobs and growth.
Mr Prodi said the widespread use of the national veto had allowed member states to block progress, in spite of Commission prompting.
"You can't have unanimity in all economic areas, or if you do, you must accept the failure of Lisbon," he said.
He highlighted the failure to agree on a common European patent - a proposal on the drawing board for almost 15 years - as symptomatic of the problem.
Mr Jose Manuel Barroso, Mr Prodi's designated successor, will put economic reform at the top of his agenda if he takes office on November 1.
But many of the European Parliament's members are threatening to vote against appointing his 24-member commission team next Wednesday in a row over the appointment of Italian, Mr Rocco Buttiglione, to justice.
