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This article gives a short overview based on the EU High Level Group of Experts on Literacy (HLWG) report to address issues and challenges in Europe on improving literacy competencies in schools. Furthermore, an analysis is conducted focusing on the promotion of reading and early literacy skills in schools taking into account psychological and institutional learning conditions in three countries (Denmark, Germany, and France) with different outcomes in PIRLS 2011 (Progress in International Reading Literacy Study). Country comparison is conducted using multiple groups – multilevel structural equation modelling (MG‐MSEM). An important finding is that policy action taken in order to evaluate and improve school effectiveness in each country must address particular needs of its educational system. Suggestions for improving reading achievement in schools are derived from the analysis.