Indicators of circular economy and their link to performance and competitiveness: multi-criteria analysis in the EU countries

Abstract The circular economy (CE) has gained increasing attention as a strategy to minimize waste, promote sustainable consumption, and protect the environment. However, the progress of CE implementation varies significantly across EU countries. This paper aims to assess the development of selected CE indicators in EU member states through a multi-criteria evaluation based on a multivariable dataset covering the period from 2010 to 2022. The study compares country rankings derived from two composite indicators: (1) an integrated index combining CE indicators, innovation capacity, and economic performance with current competitiveness ratings, and (2) an index reflecting overall performance levels. Multi-criteria decision analysis (MCDA) was applied to aggregate these indicators into a single composite score representing the level of CE advancement. The results reveal a positive correlation between the adoption of circular practices and national competitiveness, with Denmark, Austria, the Netherlands, Germany, and Belgium consistently ranking highest. In contrast, no significant correlation was found between CE performance and GDP per capita at purchasing power parity. The findings also highlight substantial regional disparities, with countries such as Bulgaria, Romania, Slovakia, and Poland showing the greatest potential for improvement. These disparities are likely influenced by differences in national policy frameworks, industrial specialization, and environmental priorities. The insights provided by this study offer valuable guidance for policymakers and stakeholders aiming to accelerate the transition to a circular economy across the EU and serve as a foundation for further scientific research.