Abstract In the light of the subsidiarity principle, this article discusses the Community competence in relation to the European Research Area. As such it responds directly to the question of whether the European commitment to consider research as one of the new emerging priorities of the EU, is reflected in the Member States domestic research policies. To this aim, the article outlines the Community policy to enhance European competitiveness and the goals set in the Lisbon Declaration (March 2000) and reaffirmed in the Barcelona Declaration (March 2002) shaping the European Research Area. It then goes on to investigate whether the Lisbon and Barcelona agenda targets on competitiveness are likely to be met at European level. The functioning and effectiveness of the Open Method of Co-ordination are examined as a tool to maximise synergies between national and community research and technological development activities. The article, using the Italian research policy as a case study, claims there are some inconsistencies between the Italian and the EU policies on research and technological development and transfer of best practice.